S&P 500 To 9,000 By 2027? Analyst Breaks Down Bullish Thesis

According to a report from Investing.com, Jefferies has a year-end target of 8,000 for the index and eyes an increase to 9,000 by the end of 2027.

• The firm sees stronger-than-expected corporate earnings and continued artificial intelligence investment outweighing risks from inflation, higher oil prices and elevated bond yields in the coming months.
• Jefferies sees the S&P 500 index reaching its predicted target by the end of 2027, bolstered by $450 in EPS and 20.8% earnings growth.
• As per the analyst, AI is a key catalyst for the earnings story. 

Jefferies reportedly forecasts the benchmark S&P 500 to extend its rally through the end of 2026 and well into next year, eyeing an upside of more than 17% from current levels in 2027. 

According to a report from Investing.com, the firm has a year-end target of 8,000 for the index and eyes an increase to 9,000 by the end of 2027. 

S&P 500: The Growth Catalysts

The brokerage firm sees stronger-than-expected corporate earnings and continued artificial intelligence investment outweighing risks from inflation, higher oil prices, and elevated bond yields in the coming months. 

For 2026, Jefferies forecasts 35% earnings growth and $373 in earnings per share. Meanwhile, it sees the index reaching its predicted target by the end of 2027, bolstered by $450 in EPS and 20.8% earnings growth.

The analyst noted that the earnings outlook has improved sharply this year, with consensus 2026 earnings growth rising from about 13% at the start of the year to 29%. The improvement is also broadening beyond the Magnificent Seven stocks, with earnings expectations for the rest of the S&P 500 rising to about 24% for 2026, as per the report. 

Meanwhile, the brokerage also said that the market's valuation remains strong and is increasingly supported by the earnings outlook. The S&P 500 trades at about 21.5 times forward earnings, while the firm expects its 2027 target to be based on a lower 20-times multiple, indicating that its bullish outlook does not depend on significant valuation expansion.

S&P 500 And AI

As per the analyst, AI is a key catalyst for the earnings story. Jefferies reportedly estimates that companies with direct or indirect exposure to AI and data-center investment already account for about 46% of the S&P 500, with their earnings expected to grow about 60% in 2026. 

While growth is expected to slow to 24% in 2027, the firm expects both AI-related companies and the rest of the index to continue delivering double-digit earnings growth.

Jefferies added that it forecasts the market to expand beyond mega-cap technology stocks. It noted that only about 36% of S&P 500 stocks were outperforming the index over the 12 months through August, significantly below the long-term average of about 47%. 

However, stronger earnings growth across sectors could help improve market breadth as investor focus shifts toward 2027 expectations. 

Risks To Markets

The firm flagged that higher Treasury yields still remain a key risk to markets. Jefferies noted that the 10-year Treasury yield has added more than 60 basis points in 2026. The firm noted that historically, a rise of more than 100 basis points over 12 months has been associated with a contraction in equity-market multiples. 

Rising fiscal deficits and increased debt issuance by large technology companies could also add to upward pressure on long-term yields, it said. 

At the time of writing, the U.S. 10-year Treasury yield was at 5%. 

S&P 500: Retail Stance

On Stocktwits, retail sentiment around the SPDR S&P 500 ETF Trust (SPY), which tracks the key benchmark index, had improved from ‘bearish’ to ‘neutral’ territory over 24 hours. 

One user said, “Once Ai will be safe the market will go all time high. Market loves war and noise.”

Another user said, “$SPY Man, I wouldn't wanna be short this express train to higher prices......BUYYYYYYYYY.”

Retail sentiment on the Vanguard S&P 500 ETF (VOO) was also ‘neutral’ at the time of writing. 

Meanwhile, retail sentiment around iShares 20+ Year Treasury Bond ETF (TLT) was ‘bearish’ at the time of writing. 

The S&P 500 index has added more than 11% this year. 

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