The continuous new highs in the US stock market have sparked a "tear up research reports" trend on Wall Street! 7000 points become a new anchor for the S&P 500 index

According to the Zhitong Finance APP, as strong corporate earnings growth data and the market's renewed bullish enthusiasm for artificial intelligence have driven U.S. stocks to a strong rise since April, recently hitting new historical highs, top analysts from Wall Street are rushing to raise their outlooks for the S&P 500 index. Not only are bullish analysts continuously "tearing up research reports" to raise their targets, but especially those analysts who have been bearish on U.S. stocks for a long time this year are also constantly "tearing up research reports"—updating and raising their S&P 500 index targets multiple times this year to keep pace with their peers' bullish expectations and the epic bull market of U.S. stocks.

Overall, these top analysts on Wall Street generally expect the overall earnings of the S&P 500 index constituents and the investment returns of this benchmark index to expand in 2025 and 2026, with some analysts predicting that the index could significantly rise to around 7,000 points by the end of this year or early next year.

Binky Chadha, a stock market analyst from Deutsche Bank, has raised his year-end target for the U.S. stock market benchmark index—the S&P 500 index—to 7,000 points, indicating an increase of over 7% from the current level. Colleagues from Barclays have also raised their forecasts, while the analyst team from Wells Fargo, a major Wall Street firm, expects the U.S. stock market to continue its bull market momentum next year, predicting an 11% increase in the S&P 500 index by the end of next year.

So far this year, the S&P 500 index has set more than 20 historical highs, rebounding over 30% since the low in April. Driven by an unprecedented AI boom, U.S. stock investors have undoubtedly shown strong bullish resilience.

There is no doubt that the cloud computing giant Oracle, which recently announced a contract backlog of $455 billion far exceeding market expectations, along with Broadcom's strong performance and future outlook announced last week, has significantly strengthened the "long-term bull market narrative" for the AI computing power sector.

The ongoing explosive growth in global AI computing power demand, coupled with the increasingly large AI infrastructure investment projects led by the U.S. government, and the continuous massive investments by global tech giants in building large data centers, largely means that for long-term investors who are fond of Nvidia and the AI computing power industry chain, the global "AI faith" has not yet finished its "super catalysis" on the stock prices of computing power leaders. They bet that the stock prices of companies in the AI computing power industry chain led by Nvidia, TSMC, and Broadcom will continue to exhibit a "bull market curve," further driving the global stock market to continue its bull market trend.

It is precisely under the epic price surge of leaders in the AI computing power industry chain such as Nvidia, Google, TSMC, and Broadcom, along with the continuously strong performance this year, that an unprecedented AI investment boom has swept through the U.S. stock market and global stock markets, ultimately driving the global benchmark index—MSCI Global Index—to significantly rise since April, recently following the S&P 500 index to continuously set new historical highs.

Wall Street analysts are competing to raise their S&P 500 index target levels

"There is a bubble, but as long as the AI capital expenditures of tech giants continue to expand, the bull market should continue," said Ohsung Kwon, the analyst who took over as chief equity analyst at Wells Fargo after Christopher Harvey's departure in August Driven by the AI boom and the optimistic sentiment surrounding the Federal Reserve's impending interest rate cuts and the resilience of the U.S. economy, the U.S. stock market has surged over the past few months. The S&P 500 index closed at a record high on Tuesday, bringing its year-to-date gain to 11%. The tech-heavy Nasdaq 100 index soared by 13%.

Broadly speaking, top analysts on Wall Street have struggled to keep up with the rollercoaster-like volatility in the stock market triggered by U.S. President Donald Trump's erratic policy moves this year. After the comprehensive global tariff policy was introduced in April, this group on Wall Street significantly lowered their future outlook for the S&P 500 index. However, as the Trump administration substantially softened its trade policy rhetoric and ultimately set tariff rates on major trading partners below the aggressive reciprocal tariffs proposed in early April, these analysts returned to a bullish stance.

The U.S. stock market rebounded sharply under the influence of interest rate cut bets and optimistic earnings data—the S&P 500 index continues to climb to record highs.

Analyst Chadha from Deutsche Bank has raised his target by nearly 7%, stating that half of the expected impact of tariff policies on U.S. inflation has already been reflected. He also noted support for the U.S. stock market from investors' active positions, better-than-expected resilience in U.S. economic growth, and the weakening "bear market-like" dollar.

Analyst Julian Emanuel from the well-known Wall Street firm Evercore ISI has raised his target for the S&P 500 index at the end of 2025 from 5,600 points to 6,250 points. He expects that driven by the "once-in-a-generation" transformative change of artificial intelligence (AI) technology, the S&P 500 index will climb to 7,750 points by the end of 2026, anticipating a potential increase of about 20%.

Overall, Emanuel's long-term outlook is more optimistic, emphasizing that the proliferation of AI will drive a dual increase in corporate earnings and valuations. Emanuel stated that during this process, a correction of 10% or more in the S&P 500 index is possible, but he believes that such corrections represent good buying opportunities in the context of a structural bull market. This analyst's bullish scenario for U.S. stocks is even more aggressive: Emanuel predicts that if an "AI-driven asset bubble" occurs, the S&P 500 index could even rise to 9,000 points.

One of the core logics supporting the pace of the U.S. stock market bull run: Wall Street continuously raises corporate earnings expectations.

The recent severe slowdown in the U.S. labor market has reignited concerns about a U.S. economic stagnation. However, after the impact of tariffs turned out to be less severe than previously feared, analysts continue to raise their earnings expectations for U.S. companies.

According to the latest data compiled by Bloomberg Intelligence, Wall Street analysts expect the overall earnings of S&P 500 constituents to surge nearly 10% in 2025, followed by an additional 13% growth in 2026 on the strong foundation established in 2025 From the perspective of the stock market valuation model DCF, performance expectations are crucial for corporate stock price expectations. Against the backdrop of the Federal Reserve's interest rate cuts, if the expected adjustments over the next year continue to be raised by Wall Street, it will strongly and continuously support the bullish momentum of the U.S. stock market, which has repeatedly reached new highs.

U.S. earnings expectations have significantly improved—Wall Street analysts have consistently raised performance outlooks since May.

At Barclays, stock market analyst Venu Krishna now expects the S&P 500 index to close at 6,450 points in 2025, up from the previous forecast of 6,050 points, primarily due to improved earnings expectations and a stabilization in global economic growth. However, Barclays' latest target implies a 1% decline from Tuesday's closing for the S&P 500 index, but it has significantly warmed compared to the previous level.

Krishna added that the upward trend in the U.S. stock market will continue into next year, potentially pushing the S&P 500 index to 7,000 points. "Although the macro environment remains under pressure, we maintain an optimistic view of 'the glass is half full,'" he wrote in a report. "Glass half full" is an English phrase that literally translates to "a half-full glass," but it is commonly used in English-speaking countries to express a very optimistic attitude.

Dubravko Lakos-Bujas, a stock market analyst from JP Morgan, also warned that short-term inflation and adverse seasonal selling factors pose risks. However, this analyst stated that due to easing trade policy resistance, the upcoming lower interest rate environment, and record shareholder returns, the U.S. benchmark index could rise to around 7,000 points by early next year.

"While we are cautious about the short-term investment outlook for the U.S. stock market, we believe that the backdrop for the S&P 500 index is very constructive when looking further ahead," Lakos-Bujas wrote in a recently released report