S&P 500 Targets Keep Rising: Barclays Joins HSBC, Tom Lee In AI-Earnings Bullish Chorus

• Barclays expects AI-driven earnings strength to support stocks while a more hawkish interest-rate outlook limits valuation expansion.
• HSBC raised its year-end S&P 500 target to 8,100 from 7,650, pointing to strong earnings growth and continued AI investment.
• Fundstrat’s Tom Lee maintains an 8,000 year-end target and has outlined a potential path toward 8,400 to 8,800 under a stronger scenario.

U.S. equities edged lower in early morning trading Wednesday, but Wall Street strategists continue to raise their year-end targets for the S&P 500, pointing to resilient corporate earnings and continued AI investment.

In a note to investors cited by TheFly, Barclays raised its year-end S&P 500 target to 7,950 from 7,800. Head of equity strategy Venu Krishna cited a "standout earnings season" led by technology. Krishna said recent earnings results support "AI-driven earnings durability," while a more hawkish outlook for interest rates should keep valuations in check.

Futures pointed to a softer open, with Dow Jones Industrial Average futures down 0.37%, S&P 500 futures 0.22% lower and Nasdaq futures off 0.37%.

The SPDR S&P 500 ETF (SPY) slipped 0.28%, while the SPDR Dow Jones Industrial Average ETF (DIA) fell 0.44%. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100, declined 0.48%. Retail sentiment around SPY remained in ‘bullish’ territory on Stocktwits over the past day.

HSBC Raises S&P 500 Target To 8,100

HSBC made a larger upward move a day earlier, lifting its year-end 2026 S&P 500 target to 8,100 from 7,650.

Head of equity strategy Nicole Inui pointed to strong earnings momentum, with S&P 500 earnings growth in the first half of 2026 approaching 40%. HSBC expects earnings to continue expanding at a 25% pace in the second half.

The firm sees AI spending as a key catalyst for semiconductors and other AI-linked companies, while a resilient consumer backdrop should support the rest of the index.

Tom Lee Sees Path To 8,000 And Beyond

Fundstrat’s Tom Lee has also steadily raised his S&P 500 outlook this year. His current 8,000 year-end target sits between the latest Barclays and HSBC forecasts.

Lee began 2026 with a 7,700 target set in December 2025 before raising it to 8,000 in June. He cited higher 2027 earnings expectations and a more conservative valuation multiple, putting the emphasis on earnings growth rather than further multiple expansion.

By July, Lee outlined a potential path toward 8,000 by year-end, with upside toward 8,400 to 8,800 under a stronger scenario. He also warned investors to expect a possible 10% to 20% drawdown between August and October.

Lee has continued to highlight AI-driven productivity, energy infrastructure investment and corporate earnings as key drivers. He has also argued that the S&P 500’s valuation multiple has compressed during the year because earnings have grown faster than stock prices.

The S&P 500 has already climbed above 7,800 this year, reaching a record intraday high of around 7,800 in August, putting Barclays’ 7,950 target within relatively close range and HSBC’s 8,100 call within reach of another 300 points.

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