Barclays lifted its year-end S&P 500 target to 7,950 from 7,800, pointing to a standout earnings season led by tech. The bank also raised its 2026 and 2027 earnings-per-share estimates while keeping its 2027 index target unchanged at 8,800.
Barclays strategist Venu Krishna raised the bank's year-end S&P 500 target to 7,950 from 7,800 in a Wednesday note, citing a standout earnings season led by tech. The bank left its 2027 S&P 500 target unchanged at 8,800.
Tech earnings drive the upgrade
Technology remained the biggest driver behind the revision, according to Krishna. Big Tech earnings grew 35% from a year earlier in the second quarter, up from 30% growth in the prior quarter. Meanwhile, earnings for the rest of the tech sector jumped 88%.
Krishna said Big Tech continued its beat-and-raise execution, reinforcing the durability of AI-driven earnings. According to CNBC: "Tech continues to deliver standout beat-to-miss ratios", with healthcare and energy also showing strength, while real estate and utilities lagged.
Earnings estimates move higher
Barclays boosted its 2026 S&P 500 earnings estimate to $365 per share from $337. The bank also raised its 2027 forecast to $414 from $389. Krishna said that after two stronger-than-expected earnings seasons, continued tech beat-and-raise results, durable AI demand and a firm industrial backdrop have kept earnings momentum intact. Earnings resilience remains sufficient to offset macro crosswinds, he said.
Hyperscaler spending keeps accelerating
Hyperscaler capital spending is forecast to exceed $1.1 trillion in 2027, up 67% from the prior year, Krishna said. Growth is expected to moderate in 2028, though spending is still projected to rise by approximately 30%. Google and Amazon are expected to be the largest contributors, with Meta close behind.
Source: CNBC
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