Key Takeaways
- Evercore ISI projects the S&P 500 will reach 7,750 by the end of 2026 in its baseline scenario, with a bull case target of 9,000 carrying a 30% probability.
- Artificial intelligence momentum across technology, communications, and consumer-focused companies represents the primary catalyst for optimistic scenarios.
- RBC Capital Markets established a 12-month S&P 500 objective at 7,900, representing approximately 7.7% appreciation from May 2026 levels.
- RBC anticipates market corrections will remain modest at 5–10%, with more substantial downturns only emerging if economic recession concerns resurface.
- A significant earnings divergence centers on AI exposure: RBC projects 28% profit growth for AI-linked companies compared with 6% for non-AI constituents.
Leading investment research firms have published their S&P 500 projections through 2026, presenting constructive outlooks while acknowledging potential volatility ahead.
Evercore ISI: Multiple Scenarios Reflect Unusual Uncertainty
Julian Emanuel, equity strategist at Evercore ISI, established a baseline year-end 2026 S&P 500 target of 7,750. Additionally, he assigned a 30% likelihood to a bullish scenario that would propel the benchmark index to 9,000.
According to Emanuel, equity markets are navigating the intersection of two powerful dynamics: an AI revolution powering technology sector gains and fundamental shifts in international geopolitical structures. This convergence generates an unusually broad spectrum of potential market outcomes.
Drawing historical parallels to the 1920s and 1990s boom periods, Emanuel highlighted the confluence of “war-related fiscal stimulus, expanding M2 money supply, and transformative productivity improvements” occurring alongside artificial intelligence advancement. His analysis suggests productivity growth rates could reach 3% annually before the decade concludes.
The firm’s tactical recommendations include purchasing long-dated call options on designated “AI Class of 2026” equities and the QQQ exchange-traded fund to capture upside potential. Simultaneously, Evercore advocates implementing collar strategies on S&P 500 fund positions to mitigate near-term vulnerabilities from energy price movements and interest rate fluctuations.
Emanuel offered a notable observation about AI’s own analytical limitations. He noted that large language models gravitate toward consensus forecasts and systematically underweight tail-risk scenarios. Consequently, sustainable competitive advantages will derive from specialized industry knowledge and comprehensive workflow ownership rather than superficial AI tools deployment.
RBC Capital: Gradual Advance With Expected Volatility
Lori Calvasina, who leads U.S. equity strategy at RBC Capital Markets, established a 12-month S&P 500 price objective of 7,900. This target represents roughly 7.7% appreciation from the index’s position in early May.
Calvasina emphasized that the upward trajectory will include periodic setbacks. She anticipates pullbacks in the 5–10% magnitude but doesn’t foresee more substantial corrections of 14–20% absent renewed recession anxieties.
RBC’s framework operates under what the firm describes as “AI in the fast lane, Middle East in the slow lane” conditions. This scenario incorporates 28% earnings expansion for AI-concentrated enterprises in 2027, contrasted against merely 6% growth for remaining index components.
The projection incorporates a 5% reduction to consensus earnings estimates and assumes inflation stabilizes near 3.3%, with the Federal Reserve maintaining current policy and 10-year Treasury yields hovering around 4.5%. Should inflation accelerate to 3.8% and trigger Fed tightening, RBC calculates fair value would decline to the 7,400–7,500 range.
Immediate headwinds identified by the firm encompass earnings estimate reductions stemming from geopolitical conflict effects, profit-taking activity in semiconductor equities, midterm election-related uncertainty, and potential interest rate increases.
RBC continues favoring growth-oriented stocks relative to value alternatives, and maintains its preference for domestic U.S. equities over international market exposure.
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