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2w ago

J.P. Morgan Says Rally Is Earnings-Driven and Sets S&P 500 Targets at 7,800 and 8,900

The bank argues that continued AI-led tech and chip spending could sustain higher stock prices if profit growth broadens beyond a concentrated core.

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 JPMorgan says the stock market rally still has support.
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Overview

  • Stephen Parker of J.P. Morgan Private Bank framed the market as 'entirely earnings-driven' in a CNBC interview reported Monday and gave a year-end base target of 7,800 and a bull case of 8,900.
  • FactSet data and analysts show Q2 profit gains are highly concentrated in Information Technology and semiconductors, with chip-related earnings driving a large share of the index’s growth.
  • Other major firms offer a wide range of year-end S&P 500 targets, from Bank of America’s 7,100 to Citi’s 8,100, reflecting disagreement over how durable and broad profit momentum will be.
  • J.P. Morgan says the Fed is not an immediate deal breaker and that markets could withstand a pause or a couple of rate increases, though unclear Fed communication could trigger volatility.
  • Morgan Stanley’s estimates that hyperscalers will spend roughly $700 billion on AI-related capex this year and more than $1 trillion by 2027 underpin bullish forecasts and make the next risk whether AI investment and earnings widen beyond a few companies.