Barclays raises S&P 500 target to 7,950 with 4% upside

Barclays raised its year-end S&P 500 target to 7,950 from 7,800. The new target leaves roughly 4% upside from the index's latest close. Barclays cited durable artificial intelligence demand. Barclays also cited repeated beat-and-raise results from Big Tech. Venu Krishna is Barclays' head of US equity strategy. Krishna raised the firm's 2026 earnings estimate to $365 per share from $337. The 2027 earnings forecast rose to $414 per share from $389. Barclays kept its 2027 index target at 8,800. Big Tech earnings grew 35% from a year earlier in the second quarter. Big Tech earnings had grown 30% in the prior period. Earnings across the rest of the technology sector grew 88%. LSEG data showed that 86% of the 492 S&P 500 companies that reported exceeded analyst estimates. The long-term average is 67.5%. Barclays said technology had strong beat-to-miss ratios. Barclays also said healthcare and energy showed strength. Barclays said real estate and utilities lagged. Krishna expects hyperscaler capital spending to exceed $1.1 trillion in 2027. That would be a 67% increase from the prior year. Krishna expects growth to moderate in 2028. Spending is still projected to rise by approximately 30%. Krishna expects Google and Amazon to be the largest contributors. Krishna expects Meta to rank close behind. JPMorgan raised its year-end S&P 500 target to 8,000. CFRA expects the index to reach 8,050. HSBC raised its target to 8,100 from 7,650. HSBC cited strong earnings and continued artificial intelligence infrastructure spending. Artificial intelligence stocks represented about 45% of the S&P 500's market capitalization. Those stocks drove nearly all of the rally. The S&P 500 closed at 7,636.36 on September 9. The index was up 11.55% for the year. The SPXXAI index stood at 3,197.09. The index had gained 4.48% year to date. Stocks outside the artificial intelligence trade had turned positive. They still trailed the broader benchmark by roughly seven percentage points. Barclays cited doubts about the durability of artificial intelligence spending. Barclays also cited sticky inflation, geopolitical uncertainty, and a more hawkish rate path.