April 21 - J.P. Morgan said on Tuesday it has raised its year-end target for the S&P 500 to 7,600, attributing the revision to stronger-than-expected earnings momentum driven by artificial intelligence and the technology sector, and to improved market sentiment following a ceasefire between the U.S. and Iran.
The updated target represents an implied upside of roughly 6.9% from Monday's close of 7,109.14. The firm had previously trimmed its projection last month, cutting its target to 7,200 from 7,500.
Alongside the index target, J.P. Morgan increased its annual earnings-per-share (EPS) forecast for the S&P 500 to $330 from $315. It also raised its EPS projection for 2027 to $385 from $355.
U.S. equities have climbed back from March lows following reports of a ceasefire in the Middle East conflict. In its note, J.P. Morgan cautioned that "given the sharp rally from recent lows and a geopolitical backdrop that, while significantly de-escalated, remains in flux, there is a meaningful risk that the market enters a short-term consolidation phase before resuming its upward trajectory."
The brokerage added that if the conflict is resolved quickly, it expects the index could approach nearly 8,000 by year-end.
Investor interest in AI and technology stocks has been a significant driver of recent gains. Strong momentum in these sectors helped the S&P 500 and the Nasdaq reach record highs last week, supported by expectations for solid first-quarter earnings.
J.P. Morgan highlighted the revival of the bullish AI trade, noting in particular that "the emergence of Anthropic's Mythos has helped reignite the bullish AI trade after a shaky start to the year." The note referenced Anthropic's unveiling of its AI model 'Claude Mythos' earlier this month and said the company halted its release over concerns that it could expose hidden cybersecurity vulnerabilities.
The brokerage observed that recent positive revisions to consensus earnings estimates have been concentrated in a relatively small group of technology firms and in the energy sector, indicating room for further upside in consensus estimates more broadly.
On longer-term positioning, J.P. Morgan said it expects the United States to remain a core long-term holding in global portfolios. The firm cited attributes it believes underpin that view - breakthrough innovation, generally superior growth, and capital returns - while acknowledging that themes of diversification and repatriation flows out of the U.S. may continue to operate in the background.
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