The bulls are still driving
Wall Street’s favorite party trick right now is simple: keep raising the bar and hope the market keeps leaping over it. Ed Yardeni just did exactly that, lifting his year-end S&P 500 target from 8,250 to 8,400 and vaulting back to the top of the 2026 forecast pile.
That’s not exactly a cautious stance. It’s more like looking at a sky-high market and saying, “Yeah, but what if it goes higher?”
Earnings are doing the heavy lifting
The bigger story is why Yardeni got more bullish. He’s betting corporate profits are accelerating fast enough to justify the move, and the numbers have been doing their best impression of a rocket ship:
- about 90% of S&P 500 companies had already reported second-quarter results by Aug. 11
- first-quarter EPS rose 19% year over year
- second-quarter EPS jumped 46.7% year over year
In other words, this isn’t just a multiple-expansion story where investors pay more and more for the same earnings. The earnings themselves are getting better, which is the kind of thing that can keep a rally alive longer than a caffeine-fueled Monday morning.
AI is helping juice the profit machine
Yardeni also pointed to semiconductors and other AI-related hardware as a key reason margins are improving. That’s the twist: the AI boom is no longer just about companies spending money on chips, servers, and data centers. It’s starting to show up in the income statement too.
He now sees S&P 500 earnings per share hitting $375 in 2026, up from $330, and $415 in 2027, up from $375. By 2029, he’s still aiming for $550 EPS and a 10,000 S&P target — because apparently the bull market has not yet been informed that it’s supposed to calm down.
What investors should watch
The takeaway here is pretty straightforward: if earnings keep outrunning expectations, the market can keep climbing even if valuations stay rich. But if profits wobble, this whole “Roaring 2020s” storyline gets a lot less fun, fast.
For now, the message is clear: Wall Street’s most optimistic camp is leaning harder into the idea that this rally has real earnings fuel behind it.
Big picture: the market’s next leg may depend less on hype and more on whether corporate profits can keep playing the role of unpaid superhero.