Wall Street’s bull case for stocks is increasingly tied to one force — artificial intelligence.
Strategists at Wells Fargo, Barclays, and Deutsche Bank all boosted their respective S&P 500 (^GSPC) targets this week while pointing to resilient earnings and a still-surging AI investment cycle as the backbone of the market’s next leg higher.
Deutsche Bank raised its 2025 forecast for the index to 7,000 from 6,550, the most optimistic among this week’s upgrades. Its chief equity strategist, Binky Chadha, sees an opportunity for the rally “to widen to more cyclical parts and away from the mega-caps as a digestion period approaches after the capex boom.”
Wells Fargo, which previously projected the benchmark index to finish 2025 in the 6,300-6,500 range, now expects the index to reach 6,650 this year and sees the S&P 500 reaching 7,200 by the end of 2026. Barclays lifted its 2025 outlook to 6,450 from 6,050.
The index was trading near 6,540 on Wednesday.
Narrow leadership has been seen as a vulnerability during the current rally. Wells Fargo likewise acknowledged the presence of “froth” in the market but argued that should not end the bull run as long as AI capex remains intact.
Barclays strategist Venu Krishna, who said the firm now has a “positive view on the entire tech space,” pointed to the same AI theme, noting that “the ongoing supply/demand imbalance in data centers increasingly favors suppliers of shorter-lived tech assets” while calling fears of AI disruption in software “overblown.”
And while strategists also flagged a range of economic risks from labor market cracks to stagflation, the consensus leaned toward cautious optimism.
As Krishna put it, “Macro is under pressure. But we take the ‘glass half full’ view.”
These latest upgrades add to a string of bullish calls in recent weeks, including Evercore ISI’s Julian Emanuel, who lifted his 2025 S&P 500 target to 6,250 from 5,600 and now sees the index surging to 7,750 by the end of 2026, powered by what he calls a “once-in-a-generation” technological shift to artificial intelligence.
The revised forecasts also come against the backdrop of markets hitting record levels this week after a rapid climb off the April lows.
The S&P 500 is up 11% so far this year, while the tech-heavy Nasdaq Composite (^IXIC) has climbed over 13%. Off the April low, the indexes are up roughly 30% and 40%, respectively.
Even the small-cap Russell 2000 (^RUT) is approaching double-digit gains this year, all fueled by optimism that the Federal Reserve is on the cusp of cutting interest rates and that corporate America can sustain earnings momentum despite policy uncertainty and tariff shocks.
