Fundstrat Global Advisors’ Tom Lee has joined a growing chorus of Wall Street bulls forecasting the S & P 500 will end the year at 8,000. Lee raised his target from 7,700 as stronger corporate earnings offset a more conservative valuation outlook. The move brings him broadly into line with optimistic forecasts from major investment banks including Goldman Sachs and Citigroup, both of which have already called for year-end targets for the U.S. benchmark at 8,000 and 8,100 respectively . Fundstrat said the higher target was driven primarily by improving earnings expectations rather than richer valuations. “We are giving a mid-year update and raising our year-end target for S & P 500 to 8,000 from 7,700. This is mainly due to higher EPS for 2027 and we have a lower target P/E,” Lee wrote in a note on Wednesday. The firm said it continues to expect price-to-earnings multiples to expand and maintained that artificial intelligence investment, energy infrastructure spending, onshoring and blockchain adoption on Wall Street remain the key drivers of earnings and economic growth this year. Even so, Lee cautioned that the path to the higher target is unlikely to be smooth. Fundstrat expects markets to face three major tests later this year: a new Federal Reserve leadership team being put to the test, the potential “unlock” of initial public offerings from closely watched companies including SpaceX and Anthropic , and the risk of petroleum product shortages stemming from the Iran conflict. Fundstrat reiterated its preference for technology, financials, industrials, small-cap stocks and energy/basic materials. It also refreshed its highest-conviction stock recommendations. Among large-cap names, Caterpillar was added to its “Top 5” alongside existing picks Advanced Micro Devices, Arista Networks, Goldman Sachs and Quanta Services. On the bearish side, Northrop Grumman, Palantir Technologies and MicroStrategy joined Echostar and Texas Pacific Land on its “Bottom 5” list. For small- and mid-cap stocks, Fundstrat added Valmont Industries and Mueller Industries to its preferred list, while Weatherford International and AeroVironment were among the names it advised investors to avoid.
