Goldman Sachs has increased its 2024 year-end target for the S&P 500 Index to 5,600, up from a previous target of 5,200. This revision is driven by strong earnings growth from five major U.S. tech stocks—Microsoft, Nvidia, Google, Amazon, and Meta Platforms—which have collectively surged 45%, now comprising 25% of the S&P 500’s market cap.
The increase is also attributed to rising investor enthusiasm about artificial intelligence (AI) leading to valuation expansion.
The revised target represents a 3.1% upside from the index’s last close of 5,431.60. Goldman Sachs anticipates that stable real yields and robust earnings growth will support a 15x price-to-earnings ratio for the equal-weight S&P 500 Index.
Goldman Sachs also noted that the upcoming U.S. presidential election poses a significant risk to the index, as market volatility tends to increase before elections but typically subsides and rebounds to higher levels post-election.
Source: Reuters