Overview
- JPMorgan said on Wednesday in its mid-year outlook that it raised the S&P 500 year-end target to 7,800 and lifted its 2026 earnings-per-share forecast to $350.
- The firm warned that extreme crowding in momentum and speculative second- and third-order AI trades has created a high probability of a rapid, disorderly selloff.
- Several other major Wall Street firms have also raised year-end S&P targets this month after unusually large upward earnings revisions driven by AI-related spending.
- JPMorgan recommends a barbell of quality growth and direct AI plays paired with low-volatility holdings and expects the Federal Reserve to hold rates through 2026.
- Analysts say gains remain concentrated in technology and semiconductors, forward valuations are elevated, and rising equity issuance or a slowdown in AI capex could trigger sharp volatility.