New York — Barclays has raised its year-end target for the S&P 500 to 7,950 from 7,800, signaling greater confidence in U.S. equities following a strong second-quarter earnings season.
The revised target is approximately 3.6% above the benchmark’s latest closing level. Barclays is also forecasting that the S&P 500 will reach 8,800 by the end of 2027.
The more bullish outlook comes after U.S. companies, particularly those in the technology sector, posted stronger-than-expected second-quarter results. LSEG data cited by Reuters showed that 86% of the 492 S&P 500 companies that had reported earnings beat analysts’ expectations. The long-term average is 67.5%.
Barclays expects ongoing investment in artificial intelligence, along with continued economic activity, to help sustain corporate earnings growth in the coming quarters.
Despite the improved outlook, the bank continues to flag risks surrounding stock valuations. It pointed to questions over whether the current pace of AI investment can be maintained, persistent inflation, geopolitical uncertainty and the potential for a more hawkish interest-rate environment.
The bank also raised its 2026 earnings-per-share forecast for the S&P 500 to $365, up from its previous estimate of $337.
The S&P 500 has already gained 12.1% this year, even as investors contend with those risks.
Barclays was less positive on utilities, lowering its rating on the sector to “neutral” from “positive.” The bank cited regulatory uncertainty, including disputes over wildfire liability reform and resistance to data-center permitting in some U.S. states.
Several other major financial institutions are also maintaining bullish views on U.S. stocks. HSBC has raised its own year-end target, while UBS Global Research, Goldman Sachs and Citigroup are forecasting that the S&P 500 will end the year at or above 8,000.
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