<\/p>\n
Though the stock market has been dilly-dallying, as the British would say, UBS is sticking to its bullish outlook for the S&P 500.\u00a0<\/p>\n
Though not a price-target reset, the bank\u2019s latest message sharpens the debate over what must happen next for stocks to continue climbing.<\/p>\n
Earlier gains were driven mainly by enthusiasm, expanding valuations, and confidence in AI, but the next phase is likely to be less forgiving.<\/p>\n
Investors are now in \u2018show-me\u2019 mode, where strong expectations leave little room for earnings misses, weaker guidance, or signs that corporate spending is losing momentum.<\/p>\n
UBS remains constructive, but the forecast depends heavily on companies delivering results rather than investors simply paying more for future growth.<\/p>\n
UBS maintains its bullish S&P 500 forecast as earnings expectations climb higher<\/p>\n
Michael M. Santiago/Getty Images<\/p>\n
UBS\u2019s 7,900 target is not a fresh reset\u00a0<\/p>\n
According to Seeking Alpha reporting, UBS Global Wealth Management is sticking with its S&P 500 target, at 7,900 by year-end.<\/p>\n
More AI:<\/p>\n
The new Chinese AI model rattling U.S. tech investorsAnthropic restores access to Mythos 5 for select organizationsSoftBank CEO offers stinging critique of Musk\u2019s AI bet<\/p>\n
It\u2019s important to note, though, that the July 15 call wasn\u2019t a new target increase. UBS had previously raised its forecast to 7,900 on May 22, up from 7,500, according to Yahoo Finance.<\/p>\n
What\u2019s new is the Swiss bank\u2019s message on what will drive the market\u2019s next leg higher.<\/p>\n
The bank believes that robust cash flow, earnings growth, and company-specific execution, rather than generalized AI enthusiasm, will pave the way for a strong finish to the year.<\/p>\n
The target has shifted several times this year.\u00a0<\/p>\n
Reuters reports that UBS entered April with a forecast of 7,700, then cut it to 7,500 on April 7 as higher oil prices threatened growth and inflation and raised the prospect of the Federal Reserve easing.<\/p>\n
The May increase marked a 400-point reset from the previous target, placing UBS 200 points above its prewar forecast.\u00a0<\/p>\n
Reuters reports that the S&P 500 ultimately closed at 7,572.42, up 28.83 points, leaving it about 0.5% below its June record close.<\/p>\n
Hence, UBS\u2019s 7,900 forecast therefore implies about 4.3% price upside by year-end, excluding dividends.<\/p>\n
Moreover, its June 2027 target of 8,200 implies about 8.3% upside from that level.<\/p>\n
So this is a constructive but measured forecast, not an extremely aggressive call. Much of UBS\u2019s original upside has already materialized since it raised the target in May.<\/p>\n
What is driving UBS\u2019s bullish forecast?\u00a0<\/p>\n
As I mentioned earlier, UBS\u2019s bullish S&P 500 forecast is built first on a major earnings reset.<\/p>\n
The bank raised its 2026 earnings estimate for the index to $335 per share from $310, which implies nearly 20% annual growth, up from its prior 11% forecast.\u00a0<\/p>\n
UBS also introduced a $375 EPS estimate for 2027, representing another 12% increase.<\/p>\n
At a 7,900 year-end target, the S&P 500 would trade at about 23.6 times projected 2026 earnings and 21.1 times 2027 earnings.\u00a0<\/p>\n
According to FactSet, it\u2019s about 25% above the S&P 500\u2019s 10-year average forward P\/E of 18.9.<\/p>\n
That makes corporate execution paramount, with companies expected to deliver unusually strong profit growth now embedded in their estimates.<\/p>\n
Semiconductors form nearly 50% of the $25 increase in UBS\u2019s 2026 EPS forecast. The sector contributed about $11, while energy added roughly $6 and all other industries contributed around $8.<\/p>\n
Additionally, UBS expects AI-related capital spending to supercharge 68% in 2026 to about $820 billion, followed by another 21% increase in 2027 to nearly $1 trillion. Tight semiconductor supply, rising chip-rental prices and ongoing capital raising makes near-term spending cuts virtually impossible.<\/p>\n
Tech stocks rally as megacaps lead gains\u00a0<\/p>\n
Tech stocks were mostly in the green on July 15, though the rally was concentrated in megacaps instead of semiconductors.\u00a0<\/p>\n
According to CNBC reporting, the Nasdaq Composite gained 0.62% to 26,269.23, outperforming the S&P 500\u2019s 0.38% move.<\/p>\n
Apple led the recovery among major AI stocks, rising 3.95% to a record closing high, while Alphabet\u2019s Class C shares rose 3.60%. Meta advanced 3.07%, Amazon gained 3.02%, and Microsoft climbed 2.78%.\u00a0<\/p>\n
Moreover, Saxo reports that fintech giant PayPal was the day\u2019s standout mover, surging 17.2%, after reports of a takeover bid.\u00a0<\/p>\n
On the flipside, the Philadelphia Semiconductor Index dropped 2.1% as investors sold off Micron, Marvell, Intel, AMD, and other hardware names.\u00a0<\/p>\n
What could derail UBS\u2019s call?<\/p>\n
The first big risk is that earnings expectations have become too demanding.\u00a0<\/p>\n
UBS itself doesn’t expect another large round of corporate guidance bumps this quarter, while broader Wall Street projections now require exceptionally strong results, particularly from technology and semiconductors.<\/p>\n
In fact, a Goldman Sachs note I covered showed that strategist Ben Snider felt that stocks might face near-term pressure from interest rate hikes, even with corporate profits being a bigger long-term driver.\u00a0<\/p>\n
Reuters reports that even though inflation cooled this week, markets are not out of the woods yet, with CME FedWatch still assigning roughly a 60% probability of a rate hike at the Fed\u2019s September 15\u201316 meeting.<\/p>\n
The second big risk is concentration.\u00a0<\/p>\n
Chip stocks and energy accounted for the bulk of UBS\u2019s EPS upgrade. A memory-pricing reversal, slower hyperscaler spending, or falling energy profits will weaken the earnings foundation behind 7,900.<\/p>\n
Thirdly, oil prices and geopolitics remain major issues. UBS previously cut its target because disruption around the Strait of Hormuz threatened to raise inflation, weaken economic growth, and delay Fed easing.\u00a0<\/p>\n
Related: Microsoft CEO adds fuel to Palantir CEO\u2019s AI warning<\/p>\n
#UBS #doubles #SampP #target<\/p>\n","protected":false},"excerpt":{"rendered":"
Though the stock market has been dilly-dallying, as the British would say, UBS is sticking…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[259],"tags":[2247,4558,336,2098],"_links":{"self":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/11334"}],"collection":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11334"}],"version-history":[{"count":0,"href":"https:\/\/stock999.top\/index.php?rest_route=\/wp\/v2\/posts\/11334\/revisions"}],"wp:attachment":[{"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stock999.top\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}