JPM lifts SP 500 target as reignited AI momentum, geopolitical calm buoy markets Investing.com -- JPMorgan has raised its year-end SP 500 price target to 7,600 on expectations of stronger earnings, pointing to renewed momentum in the AI theme and de-escalating geopolitical risks.
The bank lifted its 2026 SP 500 EPS estimate to $330, representing 22% year-on-year growth, from a prior forecast of $315, and raised its 2027 estimate to $385 from $355. Both figures sit above the Wall Street consensus.
The new price target of 7,600 is up from a prior target of 7,200, which had been set last month amid elevated geopolitical risks in the Middle East.JPMorgan kept its forward multiple unchanged at 22x, meaning the entire upgrade was driven by higher earnings rather than any expansion in valuation. Strategists led by Dubravko Lakos-Bujas said that should geopolitical tensions move toward a swift resolution, the multiple could re-expand toward 23x, which would imply an SP 500 level of ~8,000.
The team said headlines about Anthropics most powerful AI model, Mythos, were a key catalyst for the latest rally, highlighting that 66% of SP 500 AI-related names have outperformed since April 7.
The emergence of Anthropics Mythos has helped reignite the bullish AI trade after a shaky start to the year, when investors had grown uneasy with rising capital expenditure, the strategists wrote. Anthropics revenue run rate has tripled year-to-date, and the bank expects a similarly upbeat tone from hyperscalers during the current earnings season.
AI capex is forecast to rise 58% year-on-year to $775 billion by year-end 2026, with consensus projecting last-twelve-month capex to reach roughly $800 billion by the end of the first quarter of 2027.
JPMorgan expects the Mythos headlines to change investor perception around capital spending, saying that capex should be viewed with less skepticism going forward.
Still, the banks strategists flagged certain near-term risks. The 10-day RSI has exceeded the 95th percentile following the sharp rally from recent lows, and the team noted there is a meaningful risk that the market enters a short-term consolidation phase before resuming its upward trajectory.
The geopolitical backdrop, while significantly improved, remains in flux, with oil prices lingering in the $90 per barrel range.
JPMorgan expects the current first-quarter earnings season to deliver a more encouraging picture than the previous quarter, when AI spending fatigue weighed on sentiment. It sees further room for upside to SP 500 consensus earnings growth, given that recent positive revisions have largely been concentrated in a handful of technology and energy companies.