JPMorgan is heading into the new year with high hopes for the stock market. Strategist Dubravko Lakos-Bujas put his year-end 2026 S & P 500 target at 7,500, citing double-digit earnings growth and expectations of two more Federal Reserve rate cuts “followed by an extended pause.” Lakos-Bujas’ forecast implies a gain of 10.9% from Tuesday’s close. That would put the S & P 500 at record levels after an already strong 2025. The benchmark is up 15% year to date, thanks to investors piling into stocks tied to artificial intelligence. AI stocks took a hit recently amid valuation concerns, but most remain sharply higher for the year. “Despite AI bubble and valuation concerns, we see current elevated multiples correctly anticipating above-trend earnings growth, an AI capex boom, rising shareholder payouts, and easier fiscal policy,” Lakos-Bujas wrote. “More so, the earnings benefit tied to deregulation and broadening AI-related productivity gains remain underappreciated.” The strategist added that even greater gains could be in store. “Should the Fed ease policy further” than expected, the S & P 500 could top 8,000 in 2026, he said. That’s 18% from Tuesday’s close. Fed rate cut expectations soared this week after the release of subdued U.S. economic data. Per the CME Group’s FedWatch tool, traders are pricing in a more than 80% chance of a quarter percentage point rate reduction in December. What to buy JPMorgan compiled an AI/datacenter beneficiaries basket it thinks can outperform in 2026. Among the stocks in the group are Amazon , Nvidia and Alphabet . Amazon shares are up just 4.7% this year, lagging the S & P 500. Nvidia has surged more than 32% in 2025, though it’s down more than 12% in November amid rising competition in the AI space. Google-parent Alphabet has skyrocketed more than 70% in 2025, after nearly doubling over the past six months.
JPMorgan gives bullish 2026 outlook. Why it thinks S&P 500 8,000 is in play
Nov 27, 2025
