TLDR
- Barclays raised its year-end S&P 500 target to 7,950 from 7,800, implying about 4% upside
- The firm lifted its 2026 earnings estimate to $365 per share, up from $337
- Big Tech earnings grew 35% year-over-year in Q2; the broader tech sector jumped 88%
- Barclays downgraded Utilities to Neutral over wildfire liability and data center permitting issues
- Other banks including JPMorgan, Goldman Sachs, and HSBC also raised their S&P 500 targets
Barclays raised its year-end S&P 500 target to 7,950 this week, up from 7,800, pointing to around 4% upside from where the index currently trades. The move comes after a strong second-quarter earnings season driven largely by technology companies.
Brokerages' 2026 forecast for S&P 500 index target (Reuters) pic.twitter.com/fxIBB5cTK6
— Tracy Shuchart (𝒞𝒽𝒾 ) (@chigrl) September 10, 2026
Venu Krishna, head of U.S. equity strategy at Barclays, lifted the firm’s 2026 earnings-per-share estimate for the S&P 500 to $365, up from $337. The 2027 estimate also moved higher, rising to $414 from $389, though the 2027 index target stayed at 8,800.
The earnings data behind the upgrade was strong. Big Tech companies posted 35% year-over-year earnings growth in the second quarter, up from 30% the previous period. The rest of the technology sector grew even faster, posting 88% profit growth.
Across the S&P 500 as a whole, 86% of reporting companies beat Wall Street estimates. That compares to a long-term average of just 67.5%.
AI Spending Drives the Bull Case
Artificial intelligence spending is a central driver of the upgraded outlook. Krishna expects capital spending by major cloud providers to top $1.1 trillion in 2027, a 67% increase from current levels.
Google, Amazon, and Meta are expected to lead that spending push before growth moderates to around 30% in 2028.
AI stocks now make up roughly 45% of the S&P 500’s total market value. The headline index is up 11.55% year-to-date, sitting at 7,636.36. By comparison, the S&P 500 Excluding Artificial Intelligence Enablers Index is up just 4.48%, showing how much AI names are carrying the market.
Micron Technology holds a perfect analyst Smart Score of 10 with a price target implying 57% upside. Nvidia carries a Strong Buy rating with a target suggesting 48% upside. Amazon and Alphabet also hold top scores with projected upsides of around 33% and 29%.
Utilities Downgraded, Caution Remains
Barclays downgraded the Utilities sector to Neutral from Positive. The firm cited regulatory friction around California wildfire liability reform and growing opposition to data center permitting in several U.S. states.
Despite the bullish target, Barclays said it stays cautious on valuations. High interest rates, resilient inflation, and geopolitical uncertainty remain risks.
If conditions stay strong, Barclays sees the index reaching 8,350. If they worsen, it projects a drop toward 6,750.
Other major banks have also raised their targets. JPMorgan lifted its year-end forecast to 8,000, CFRA moved to 8,050, and HSBC raised its target to 8,100 from 7,650. Goldman Sachs, UBS, and Citigroup all project the S&P 500 ending the year at or above 8,000.
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