HSBC Raises S&P 500 Target to 7,650 as AI and Earnings Lift Outlook

3 articles · Updated · Reuters · May 11

7,650 is HSBC’s new year-end target for the S&P 500, up from 7,500 and implying about 3.4% upside from Friday’s 7,398.93 close.
20% earnings-per-share growth to $325 in 2026 underpins the call, with the Magnificent Seven still expected to drive a large share of gains.
29% first-quarter earnings growth is currently on track for the index, according to LSEG I/B/E/S, reinforcing a rally that has pushed U.S. stocks to record highs.
HSBC said sentiment is shakier than earnings support suggests because the advance has been narrow, with most stocks still below their 52-week highs.
8,000 points is possible, the bank said, if tech valuations strengthen further, lagging sectors recover and AI-led earnings gains spread more broadly.

With AI spending soaring but returns lagging, is the market's optimism pricing in a future that might not arrive?

The market rally mirrors the dot-com era's narrowness. Are investors ignoring history's warnings about such concentrated bets?