Citigroup Raises S&P 500 End-Year Target to 8100 Points, with AI Earnings Growth as the Main Driver

BlockBeats News, June 8th. Citigroup stated that the profit growth brought by AI development is expected to drive the S&P 500 index to break through the 8,000-point mark in 2026. The bank has raised its year-end target for the S&P 500 index to 8,100 points, representing a potential increase of over 9.5% from last Friday's closing price, up from the previous target of 7,700 points.

Strategist Kronat predicted that the S&P 500's earnings per share will reach $350 in 2026 and rise to $400 in 2027. Kronat said, "AI is favorably driving the fundamentals of related industries, and we are confident in the continued earnings surprises by the end of the year." He pointed out that the first-quarter earnings surprises were unusually widespread, and although it may be challenging to sustain, the earnings surprise rate is expected to remain above normal levels for the next few quarters. Kronat believes that earnings will replace valuation expansion as the main driver of the index.

He added that despite uncertainties such as the US-Iran conflict, inflation, and interest rate path, AI spending remains the focus of investors. Addressing concerns about an AI bubble, Kronat believes that the market's enthusiasm for AI growth is far from over. "We are currently in the middle game phase, and future price-to-earnings ratios will tend to be moderate, with earnings growth taking on greater responsibility," he said.