June 8 (Reuters) - Citigroup became the latest Wall Street brokerage to raise its 2026-end target for the S&P 500 index beyond the 8,000 mark, citing resilience in corporate earnings and AI-driven growth.
The widely tracked benchmark index is up nearly 8% so far this year, but fell sharply on Friday following stronger-than-expected nonfarm payrolls data.
The brokerage lifted its index target to 8,100 from 7,700, implying an upside of roughly 10% from the index's last close.
The firm also raised its S&P 500 earnings-per-share forecast to $350 for 2026, up from $320 set in December 2025, and introduced a $400 preliminary target for 2027.
Citigroup joins a wave of bullish calls from brokerages that expect AI momentum and strong corporate earnings to offset the inflationary pressures and supply risks from the Middle East conflict in the short term.
"We have high confidence in continued earnings beats through year-end," Citigroup said in a note dated June 5.
However, Citi warned that the "persistence of AI-driven growth beyond 2027 remains a key question."
"Our view is that this is not a traditional cycle and looks more like a one-time capex supercycle... thus increasing the burden on earnings growth and related expectation to drive index price action."
Citi strategists said that while AI-related ecosystems are expected to expand beyond technology firms, attention will eventually shift to whether U.S. companies can deliver on the productivity gains promised by AI, beyond 2027.
"Beyond that (2027)...we need to acknowledge some degree of deceleration (if not decline) in spending will eventually set up for an equity market hangover effect. But that is not currently in the line of sight."
Reporting by Kanchana Chakravarty in Bengaluru; Editing by Harikrishnan Nair
Source: Reuters