Citi Raises S&P 500 Index Year-End Target to 8100 Points, with AI Earnings Growth as the Primary Driver

June 8 — Citigroup said AI-led profit growth is projected to push the S&P 500 above the 8,000-point threshold in 2026, as it lifted its year-end target for the benchmark index to 8,100 points. That’s a more than 9.5% jump from last Friday’s closing level, up from the bank’s prior target of 7,700 points. Citigroup strategist Kronat projected the S&P 500’s earnings per share (EPS) will reach $350 in 2026 and rise to $400 in 2027. “AI is meaningfully boosting the fundamentals of related industries, and we’re confident in the continuation of upside earnings surprises through year-end,” he noted. First-quarter earnings beats were unusually widespread, he added, and while sustaining that pace may prove challenging, the surprise rate will stay above historical norms in coming quarters. Kronat emphasized that earnings growth will replace valuation expansion as the index’s primary driver. Despite lingering uncertainties that could spark market volatility — including potential U.S.-Iran tensions, inflation, and interest rate path fluctuations — AI spending remains the top focus for investors, he said. On concerns over an AI bubble, Kronat argued the market’s enthusiasm for AI-driven growth is far from fading. “We’re currently in the middle innings of this cycle,” he explained. “Future price-to-earnings ratios will likely normalize to more moderate levels, with earnings growth shouldering much of the index’s future gains.”