CITIGROUP raised its S&P 500 year‑end target to 8,100 from 7,700, implying just
over 9.5% upside from last Friday’s close and says AI-led earnings growth could
push the index past 8,000 in 2026. The bank projects S&P 500 EPS of $350 in 2026
and $400 in 2027. Analysts note unusually widespread Q1 earnings beats; while
not fully sustainable, they expect the earnings surprise rate to remain above
normal for several quarters and for earnings growth to supplant valuation
expansion as the primary market driver. They warned US‑Iran hostilities, inf and
the interest‑rate path could spur volatility, but said AI spending remains the
focal point for investors and concerns about an AI bubble are premature — the
market is in the mid‑game and future P/E should moderate as earnings bear more
of the burden for returns.
