• JPMorgan strategist Dubravko Lakos-Bujas raises his S&P 500 year-end 2026 target to 7,500, with potential to reach 8,000 under more accommodative Fed policy.
  • The forecast is driven by expectations of 13-15% annual earnings growth over the next two years and continued AI-driven investment.
  • Despite recent AI stock volatility, Amazon ($AMZN), Nvidia ($NVDA), and Alphabet ($GOOGL) are identified as likely outperformers for 2026.

JPMorgan has dramatically shifted its stance on U.S. equities, with strategist Dubravko Lakos-Bujas now projecting the S&P 500 could reach 7,500 by the end of 2026—a target that would represent one of the most bullish forecasts on Wall Street. In a note to clients, the firm outlined a scenario where the benchmark could even surpass 8,000 if the Federal Reserve adopts more aggressive monetary easing.

The revised outlook marks a significant departure from JPMorgan's previously cautious stance and reflects growing confidence in what Lakos-Bujas describes as a "sustainable earnings supercycle." The projection is underpinned by expectations of robust earnings growth of 13-15% annually over the next two years, fueled by continued capital expenditure in artificial intelligence infrastructure.

"We see the U.S. remaining the world's growth engine through 2026," Lakos-Bujas wrote, pointing to strong consumer spending, labor market stability, and AI-driven productivity gains. The firm anticipates two Fed rate cuts in early 2026, with further easing possible if inflation continues to moderate toward the central bank's 2% target.

Despite recent volatility that has seen some AI stocks retreat from their highs, JPMorgan identified Amazon ($AMZN), Nvidia ($NVDA), and Alphabet ($GOOGL) as likely market leaders next year. The firm cited their dominant positions in AI infrastructure, cloud computing, and what it called "unmatched financial firepower" to continue investing through economic cycles.

People familiar with the matter said JPMorgan's research team has been upgrading its models throughout November to account for what it now sees as a "structural re-rating" of quality growth stocks rather than a temporary bubble. The note specifically mentioned that current market concentration in tech leaders is justified by earnings visibility and shareholder returns.

The bullish call comes as other major institutions are also raising their long-term targets. Deutsche Bank recently predicted the S&P 500 could reach 8,000 by 2026, while Fundstrat's Tom Lee has also pointed to 7,500 as a reasonable target given strong earnings momentum and falling inflation.

Still, the optimistic outlook isn't without its skeptics. Some portfolio managers have expressed concerns about an "AI bubble" and what they describe as a "K-shaped" market where a handful of stocks drive most of the gains. One hedge fund manager, who asked not to be named discussing client positions, said the concentration risk reminds him of the dot-com era, though he acknowledged current earnings growth appears more sustainable.

JPMorgan's note also highlighted potential benefits from anticipated fiscal and regulatory developments, including the "One Big Beautiful Bill Act" that could ease fiscal constraints and deregulation in financials, housing, and energy sectors.

Attempts to reach additional JPMorgan strategists for comment were unsuccessful Thursday afternoon. The firm's asset management division declined to elaborate beyond the published research.

Correction: An earlier version of this article misstated the potential upside scenario for the S&P 500. The 8,000 level would require more accommodative Fed policy than currently anticipated.