UBS has raised its earnings-per-share forecasts for the S&P 500, citing stronger-than-expected corporate performance and accelerating artificial-intelligence adoption. The bank lifted its 2026 EPS estimate to $350 from $335, a 4.5% increase, and raised its 2027 EPS projection to $400 from $375, a 6.7% adjustment.
The upgrades follow a broad-based earnings rebound, particularly in semiconductors, technology hardware and energy, where profit expectations were revised higher across nearly all sectors. UBS also increased its S&P 500 index targets, setting a December 2026 target at 8,100, up from prior levels, and a June 2027 target of 8,400. Downside and upside scenarios were set at 5,500 and 9,500 respectively.
Strategists led by David Lefkowitz highlighted three pillars supporting their constructive view: resilient economic growth, a patient Federal Reserve and accelerating AI adoption. UBS expects inflation to ease in the second half of the year as tariff effects dissipate, reinforcing its view that the Fed will maintain its current policy stance.
The bank noted that manufacturing activity and construction job growth have improved, contributing to a more balanced market rally. However, risks remain, including the potential for sustained oil-price gains, renewed inflation pressures and weaker-than-expected returns from AI investments.
