UBS Raises S&P 500 Target to 7,500 by 2026 on Tech Earnings Strength
UBS has lifted its S&P 500 target to 7,500 by 2026, citing robust earnings growth driven by large-cap tech companies. The bank now projects 14.4% earnings growth for the index in 2026, with nearly half stemming from the technology sector alone. AI momentum remains a key catalyst, though UBS anticipates a broader capex expansion beyond tech in the coming years.
The report warns of potential short-term softness due to tariff impacts but expects a rebound as consumer confidence improves and rates decline. UBS frames U.S. growth as "essentially one big bet on AI," with AI-related capex contributing 78 basis points to GDP growth in H1 2024. When including adjacent spending, the impact jumps to 1.4%.