JPMorgan Raises S&P 500 Year-End Target to 7,800, Warns of Crowded AI Trades

According to JPMorgan Chase's strategy team led by Dubravko Lakos-Bujas, the firm raised its 2026 year-end S&P 500 target to 7,800 points from 7,600 today (June 25), citing continued upward revisions in corporate earnings forecasts and nearly doubled artificial intelligence capital expenditure. Earnings expectations for 2026 and 2027 have each risen about 10% since the start of the year, a magnitude typically seen only in post-recession recoveries.

However, JPMorgan cautioned that lower-quality growth stocks, speculative growth stocks, and second and third-tier AI concept stocks show "extreme crowding." The firm warned that fund outflows could trigger sharp pullbacks, while increased equity supply and potentially tighter monetary policy may cap further valuation expansion.