Defense · Report Line
Barclays raised its year-end target for the S&P 500 index to 7,950 from 7,800 on Wednesday, citing a standout earnings season led by technology companies. The revised target is about 3.6% higher than the index’s last close. Barclays expects the benchmark to reach 8,800 points by the end of 2027.
U.S. corporate earnings have outperformed Wall Street expectations in the second quarter, with 86% of the 492 S&P 500 companies exceeding analyst estimates, up from the long-term average of 67.5%. AI investment and healthy economic activity are expected to support earnings momentum in the coming quarters. However, Barclays remains cautious on valuations due to concerns over the durability of AI spending, persistent inflation, geopolitical uncertainty, and a more hawkish rate outlook.
Despite these concerns, the S&P 500 has risen 12.1% this year. Barclays also raised its 2026 earnings-per-share forecast for the S&P 500 to $365 from $337. The utilities sector was downgraded to 'neutral' from 'positive' due to regulatory uncertainties, including challenges around wildfire liability reform and opposition to data center permitting in some U.S. states.
HSBC also raised its year-end target, supported by strong corporate earnings and sustained AI infrastructure spending. Multiple firms, including UBS Global Research, Goldman Sachs, and Citigroup, project the S&P 500 will end the year at or above 8,000.
Source: BNN Bloomberg
