Published by Global Banking & Finance Review®
Posted on November 24, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleDeutsche Bank predicts the S&P 500 will rise to 8,000 by 2026, driven by AI and strong earnings. HSBC and Morgan Stanley offer slightly lower forecasts.
(Reuters) -Deutsche Bank on Monday projected the S&P 500 index to climb to 8,000 by the end of next year, citing strong corporate earnings and artificial intelligence-driven gains, making it the most bullish among major global brokerages.
The European brokerage's target implies a massive 21% upside to the index's last close of 6,602.99. It also forecasts S&P 500 earnings-per-share to hit $320.
In a separate note on Monday, Britain's HSBC set its 2026 year-end target at 7,500, also betting on AI strength.
The benchmark index has gained about 12.3% this year, spurred broadly by investor optimism around AI, robust corporate profits and expectations of falling interest rates, despite fears of a market bubble and high tech valuations.
"Bubble or not – history shows that rallies can last for quite some time (3-5 years in the dot-com/housing boom), so we see more to come and recommend a broadening of the AI trade," HSBC analysts said.
Mega-cap tech names such as Nvidia, Microsoft and Alphabet remain the main engines of the rally, as AI-driven spending underpins record levels of capital expenditure.
"Rapid AI investment and adoption will continue to dominate market sentiment," Deutsche Bank strategists said in their 2026 global outlook note.
"We see (U.S.) discretionary investor positioning as a source of potential market upside."
Earlier this month, Morgan Stanley forecast U.S. stocks to outperform peers next year and estimated the index to hit 7,800 by end of 2026.
(Reporting by Joel Jose and Siddarth S in Bengaluru; Editing by Mrigank Dhaniwala and Sahal Muhammed)
Artificial intelligence in finance involves using machine learning and data analytics to improve decision-making, automate processes, and enhance customer service in financial services and banking.
Investment portfolios are collections of financial assets, such as stocks, bonds, and cash equivalents, held by an individual or institution to achieve specific investment goals.
Market capitalization is the total market value of a company's outstanding shares of stock, calculated by multiplying the share price by the total number of shares, indicating the company's size.
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