Wall Street upside? HSBC sees S&P 500 at 8,000, raises 2026 target as AI boom and tech earnings fuel optimism

Global brokerage HSBC has turned more bullish on US equities, raising its year-end 2026 target for the S&P 500 and saying the benchmark could even cross the psychologically important 8,000 mark if sentiment around technology, artificial intelligence and geopolitics improves.

In a strategy note dated May 11, HSBC raised its official year-end 2026 S&P 500 target to 7,650 from 7,500 earlier, citing stronger corporate earnings and continued resilience in large-cap technology stocks.

The brokerage said first-quarter earnings have come in stronger than expected, prompting it to raise its 2026 earnings per share estimates by 8%. HSBC now expects S&P 500 EPS growth of 20% in 2026, or around $325 per share, with large technology names and hyperscalers continuing to drive profit growth.


But beyond its base-case target of 7,650, HSBC said the index could potentially breach 8,000 if investor sentiment broadens beyond a narrow group of technology leaders.

"The S&P 500 is back at record highs as tech stages a comeback, and a solid Q1 earnings season is providing support," the brokerage said in the note.

HSBC said a sentiment rebound could come from several triggers, including a re-rating in technology stocks, wider participation from laggard sectors, stronger monetisation of AI investments, and a more supportive macro environment with lower long-term interest rates.

According to the brokerage, each of these factors could potentially add 100 to 700 points to the index.

The brokerage noted that technology remains the single biggest swing factor for Wall Street, with the sector now accounting for more than half of the S&P 500’s market capitalisation and over 40% of index earnings.

HSBC said the recent rally in US equities has been relatively narrow, with many stocks still trading below their 52-week highs. A broader participation across sectors could open room for another leg higher in the market.

The report also highlighted AI adoption as a key medium-term earnings driver, saying efficiency gains from artificial intelligence could support margin expansion across sectors beyond pure technology. At the same time, HSBC flagged several risks that could derail the rally.

These include a slowdown in technology earnings, elevated oil prices caused by supply disruptions, and a more hawkish Federal Reserve if inflation reaccelerates.

The brokerage said sustained energy shocks could slow economic growth, while higher capex requirements in technology could become a challenge if borrowing costs remain elevated. Wall Street has remained near record highs in recent sessions, helped by robust earnings from AI-linked companies and easing fears around a broader escalation in West Asia, though investors remain sensitive to interest rate signals and energy prices.