Evercore ISI: AI boom expected to drive S&P 500 up another 20% by end-2026

Evercore ISI: AI boom expected to drive S&P 500 up another 20% by end-2026

Evercore ISI Group has issued a bullish outlook on the S&P 500, expecting the index to rise by another 20% by the end of 2026, driven primarily by the ongoing AI boom. The investment research firm attributes this expected growth to the increasing adoption and integration of artificial intelligence technologies across various sectors, which is poised to boost corporate earnings and market performance.

NVIDIA, a leading innovator in AI technology, has been a significant driver of this trend. The company reported strong financial results for the second quarter of fiscal 2026, with revenue growing 6% sequentially and 56% year-over-year to $46.7 billion. Despite these impressive numbers, NVIDIA's stock price dipped 4% following the announcement, reflecting investor concerns about the broader AI market and potential bubble risks [1].

Marvell Technology Inc. (NASDAQ: MRVL), another key player in the AI chip market, has also experienced volatility. The company recently completed the $2.5 billion all-cash sale of its automotive Ethernet business, redirecting its focus towards the booming data center and AI markets. While Evercore ISI Group maintains an Outperform rating on Marvell Technology, it has cut its price target to $122, reflecting a more cautious outlook amidst recent setbacks in revenue forecasts and stock performance [2].

The AI market's potential and challenges were further highlighted by a recent MIT survey, which found that 95% of companies experimenting with AI aren't seeing any revenue from it. This suggests that while AI adoption is widespread, its financial impact remains uncertain [1].

Despite these uncertainties, Evercore ISI Group's positive outlook on the S&P 500 is supported by the broader trends in the AI sector. The company's strategic initiatives and strong financial performance are promising, but the AI bubble risk remains a significant concern. Investors should closely monitor the execution of AI strategies by companies like NVIDIA and Marvell, as well as the broader market dynamics in the AI chip sector.

References:
[1] https://www.ainvest.com/news/ai-bubble-threatens-stock-market-economy-nvidia-shares-dip-record-results-2508/
[2] https://www.ainvest.com/news/evercore-isi-group-maintains-outperform-rating-marvell-technology-cuts-pt-122-2508/