RBC raises S&P 500 target to 7,900 on earnings growth and AI strength
RBC Capital Markets lifted its year-end target for the S&P 500 to 7,900 from 7,750, citing resilient earnings growth and strength in artificial intelligence-linked sectors. The new target implies 7.7% upside from the index's recent close of 7,335.66.
The move reflects confidence in technology and AI companies driving positive earnings revisions. RBC said strong demand for AI infrastructure and solid profit growth have supported valuations even as U.S. companies navigate higher costs and geopolitical risks.
The S&P 500 posted its largest monthly percentage gain since November 2020 last month, reaching record highs as investor appetite for AI-related investments remained strong.
Wall Street consensus shifts higher
RBC's decision follows similar moves by J.P. Morgan and Barclays, which raised their targets last month. Both cited easing geopolitical risks and improving earnings momentum.
The rally has persisted despite headwinds: sticky inflation, uncertainty over the timing of U.S. rate cuts, and ongoing geopolitical tensions. Large-cap growth stocks have maintained their leadership position.
Healthcare sector downgraded
RBC downgraded U.S. healthcare stocks to "market weight" from "overweight" due to earnings revisions, fund outflows, and policy uncertainty. The firm said valuations remain attractive despite the downgrade.
For professionals managing portfolios or analyzing market trends, understanding how AI for Finance and AI Data Analysis tools can process earnings data and market signals has become increasingly relevant to investment decisions.
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