Citi quietly resets S&P 500 price target for the rest of 2026

Citi quietly resets S&P 500 price target for the rest of 2026 Moz Farooque Mon, June 8, 2026 at 4:03 AM GMT+7 4 min read C Wall Street spent the bulk of 2026 figuring out whether the stock market has come too far, too fast. However, according to TheFly, Citi analysts are looking past the immediate damage as they revamp their S&P 500 target. They make the case that something far more durable may be taking shape, specifically a robust profitability cycle driven by heavy AI infrastructure spending. For perspective, stock market gains typically come from a couple of places. Investors can either pay more for the same level of earnings, pushing prices higher, or businesses can actually make a lot more money, offering a sturdier foundation. Citi’s Scott Chronert is leaning heavily on the latter. His updated S&P 500 forecast hinges on genuine, sustainable earnings growth, a thesis that could potentially revitalize Wall Street. Moreover, it comes at a point where the markets are dealing with renewed inflation worries, Middle-East related tensions, and higher rate fears. For context, the S&P 500 closed Friday, June 5, at 7,383.74, down 200.57 points, or 2.64% after hitting a record close of 7,609.78 on June 2. The big drop on Friday was linked to a stronger-than-expected May jobs report, which showed the U.S. economy adding 172,000 jobs. The report fueled some major concerns about the Federal Reserve keeping interest rates higher for longer. Chip stocks took the hardest hit, with the Philadelphia Semiconductor Index losing north of $1 trillion in value according to Reuters, with Nvidia, Intel, AMD, and Broadcom among the losers. Over the past three months, though, the trend has been mostly positive. The S&P 500 was up 553.03 points, or 8.10%, since March 5, despite the Friday debacle. Citi analysts, though, feel it’s more of a temporary blip, with Citi forecasting that the AI spending wave becomes large enough to efficiently reshape the market’s earnings power. Chronert and his team raised the bank’s year-end 2026 S&P 500 target to 8,100, up from 7,700. JPMorgan resets S&P 500 price target for the rest of 2026 Vanguard challenges the S&P 500 as a one-stop strategy Goldman Sachs resets Broadcom stock forecast That’s a 400-point increase, or a 5.2% increase from the previous forecast. Chronert’s case is purely built on the strength of earnings, and he now expects the S&P 500 index-level earnings to surge to an eye-catching $350 in 2026, with early estimates of $400 in 2027. Using S&P 500 operating EPS as the index-level earnings measure, here’s how the S&P 500 has performed over the past five years: 2025: $263.61. Source: Standard & Poor’s/S&P Dow Jones Indices data via YCharts and GuruFocus. That offers strong visibility for the index even if valuation multiples stop growing. Anyone who follows the stock market has heard about the AI bubble like a broken record, and has spent time worrying about when it might burst. The AI trade has been criticized for being too dependent on investor enthusiasm. In fact, in a recent post, I covered Fed President Mary Daly, who said that 2027 could be a litmus test for AI stocks and noted that many of the promised productivity gains have yet to come to fruition. However, Citi’s view is that AI infrastructure spending is feeding directly into corporate fundamentals, especially for the top names in tech. Chronert said that the market’s tremendous growth cluster currently represents 45% of the S&P 500 earnings weight, up from 15% roughly three decades ago. That essentially means that the businesses most exposed to AI spending carry a lot more influence than they previously did. On top of that, Citi expects price-to-earnings multiples to drop as the AI cycle matures. For some color, the S&P 500 is currency trading at a remarkably elevated valuation at a trailing P/E at about 25.6 according to GuruFocus, while FactSet puts the forward 12-month P/E at 21.1, comfortably above the 5-year average of 19.9. 2021: 4,766.18 (+26.89% from 2020). Source: YCharts. Related: Bank of America resets Broadcom stock price target after earnings This story was originally published by TheStreet on Jun 7, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

Citi quietly resets S&P 500 price target for the rest of 2026

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