UBS Group (UBS) has raised its year-end target on the benchmark S&P 500 index, saying that U.S. stocks should continue benefitting from “AI tailwinds” in coming months.
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High conviction NVDA bears now have this Tradr ETFThe Swiss bank has raised its S&P 500 year-end price target to 7,900 from 7,500 previously and introduced a new June 2027 target of 8,200. The lender’s equity analysts say they remain bullish on the U.S. market due to resilient consumer spending, strong first-quarter earnings, and surging demand for artificial intelligence (AI) infrastructure.
UBS has also raised its 2026 earnings per share estimate for the S&P 500 to $335 from $310, representing 20% growth, and introduced a 2027 estimate of $375, implying a further 12% growth next year. The bank said higher profit estimates and heavy AI spending are the main drivers of its price target increases.
Risks Remain to the Market
In a note to clients, UBS said that half of its upward earnings revision is concentrated in semiconductor stocks such as Nvidia (NVDA) following that company’s blowout financial results. Energy sector profits due to rising crude oil prices should provide another tailwind to the market in coming months.
While UBS remains bullish on U.S. stocks, the bank did flag some risks to its outlook, namely the ongoing closure of the Strait of Hormuz waterway near Iran, where 20% of the world’s crude oil is shipped. “A resumption of energy flows from the Strait of Hormuz is probably needed for the next leg of the rally,” writes UBS in its note.
Is NVDA Stock a Buy?
Nvidia’s stock has a consensus Strong Buy rating among 42 Wall Street analysts. That rating is based on 40 Buy, one Hold, and one Sell recommendations issued in the past three months. The average NVDA price target of $281.97 implies 26% upside from current levels.
