The S&P 500 is already trading above the average Wall Street target for year-end 2026. Now one of the market’s most bullish strategists is moving his target even higher.
Veteran investor Ed Yardeni has raised his year-end S&P 500 target from 8,250 to 8,400, reclaiming the top of Wall Street’s 2026 forecasting table.
The upgrade reflects a sharp acceleration in earnings expectations, with the firm betting that stronger corporate profits can keep the rally going.
Yardeni also sees an 80% probability that the "Roaring 2020s" will continue, up from 60% previously, as the firm’s bullish scenario increasingly incorporates the market’s recent earnings momentum.
Earnings Backdrop Becomes Difficult To Ignore
About 90% of S&P 500 companies had reported second-quarter results by Aug. 11. Earnings per share rose 19% year over year in the first quarter and 46.7% in the second quarter.
Yardeni has responded by raising its S&P 500 earnings-per-share forecast to $375 for 2026, from $330. The 2027 estimate rises from $375 to $415 .
The firm says consensus expectations have also been rising at an unusual pace.
“We’ve never seen consensus earnings expectations rise so quickly,” Yardeni said.
That matters because earnings, rather than valuation expansion alone, are increasingly driving the market higher.
The SPDR S&P 500 ETF Trust (SPY) now trades near record highs, and is up 12.6% year-to-date.
The Profit Margin Story Is Just As Important
Those forecasts imply forward profit margins of 16.7% this year and 16.9% next year, above consensus estimates of 15.4% and 16.6%.
AI is part of that equation. Yardeni highlighted that soaring prices for semiconductors and other AI-related hardware are contributing to the increase in S&P 500 profitability.
That creates an important second-order effect. The AI boom is no longer only an infrastructure spending story. It is increasingly appearing in corporate earnings.
The firm expects forward earnings to reach $550 by 2029. Yardeni is also keeping its forward price-to-earnings range at 18–22 through the end of the decade.
Yardeni Moves Toward The Top Of Wall Street’s Board
Yardeni’s new 8,400 target moves it above Morgan Stanley’s 8,300 forecast.
Here is the full July 2026 snapshot, with JPMorgan’s target updated to 8,000 earlier this week:
The Bigger Bet Is 2029
The 8,400 target is only part of Yardeni’s bullish case.
The firm maintains its 10,000 S&P 500 target for the end of 2029 and says it could raise it if the "Roaring 2020s" continue.
Yardeni is assigning an 80% probability to that scenario, up from 60% before it was combined with the firm’s previous melt-up scenario.
The remaining 20% is reserved for a recession severe enough to produce a bear market.
“We could certainly have another recession scare along the way,” Yardeni said.
But the firm does not expect such a scare to become another 1999–2000-style market collapse.
“We think any pullback (and even a meltdown) will be a buying opportunity,” Yardeni said.
The investment implication is straightforward: the S&P 500’s next move may depend less on whether investors are willing to pay higher multiples and more on whether earnings can keep outrunning expectations.
For now, the earnings engine is doing exactly that.
