JPMorgan: S&P 500 Year-End Target Raised to 8,000 Points, AI Monetization Starting to Catch Up with Spending Pace

TechFlow News, according to TechFlow Research, JPMorgan's August 9 US stock strategy report raised the year-end target price for the S&P 500 from 7,800 points to 8,000 points, the 2026 EPS forecast from $358 to $365 (+35%), and the 2027 EPS forecast to $420 (+15%). Among the 87% of companies that have disclosed earnings, 78% exceeded expectations, with Q2 earnings growth reaching 53%.

The report noted that AI capex is expected to reach $900 billion in 2026 (+85%), exceeding $1.2 trillion in 2027, with hyperscalers accounting for about 87%. However, cloud revenue is accelerating monetization: AWS up 37%, Azure up 43%, Google Cloud up 82%; AWS backlog increased 36% quarter-over-quarter to $496 billion, and Google backlog increased by $55 billion to $514 billion. JPMorgan believes that order coverage is improving, and monetization speed is catching up with spending speed. Excluding $152 billion in unrealized private equity gains from Google and Amazon combined (mainly stemming from Anthropic's $65 billion financing), Q2 actual earnings growth was about 31%, and 2026 normalized EPS is about $347 (+28%). JPMorgan maintains the assumption of a forward P/E ratio of about 20 times for the S&P 500 index unchanged, stating that the earnings upward revision is sufficient to support the target price increase, but warned to be wary that paper gains may be unsustainable.