Evercore ISI's Julian Emanuel is confident the bull market can surge to new heights. The strategist issued a 2026 S & P 500 year-end target of 7,750, saying the artificial intelligence revolution will drive gains next year as it fundamentally remakes society and the market. "A Technological Revolution lifting stocks, multiples and society to new heights," wrote the head of the equity, derivatives and quantitative strategy team in a Sunday note. Emanuel looked ahead and looked back, pointing to, "A Structural Tech driven Bull interrupted by a cyclical non-recession Bear Market which regained all-time highs in rapid fashion, with higher highs driven by a Fed cutting rates." "That was the Internet Revolution of the late 1990's," he continued. "And it's also the AI Revolution Bull Market of today." The strategist highlighted several positive forces will lift the stock market to his 2026 target. They include the boost the economy will get later this year from the One Big Beautiful Bill Act, investors leaving behind peak tariff uncertainty and the growing use of AI in all areas of the economy. Yet, Emanuel has a wide range between his bull and bear cases for 2026. In his bull case, the strategist sees the S & P 500 shooting up to 9,000, or 40% above current levels, creating an AI bubble. In his bear case, he expects the broader index could tumble to 5,000 if stagflation takes holds in the economy. More 'scares' inevitable The strategist also raised his 2025 S & P 500 year-end forecast to 6,250 from 5,600, which had been the lowest current-year target on the Street. Even the new 2025 forecast is below the 2025 CNBC Market Strategist survey consensus target of 6,445. It's also below where the S & P 500 was last trading, around 6,400, suggesting the strategist remains wary of downside risk between now and the end of the year. Investors returning from the holiday weekend are kicking off a seasonally weak month facing a raft of macroeconomic concerns, from the latest developments on trade to the future of Federal Reserve independence. Still, Emanuel urged investors to stay the course even in the event of a correction. The strategist likened the current market to a "bucking bull," one that will try to dislodge traders even as it moves higher. "Great 'Bucking Bull' Markets Tempt Investors to Sell. Don't Fear a Bull Market Drawdown, Hedge It to Buy It," Emanuel wrote. "'Scares' are a part of innovation-driven Bull markets as their narratives are stress tested in real time, regular -10% or more corrections during the 1990's Dot.Com Boom case in point." "The AI Bull is no different, overcoming concerns over DeepSeek, sheer scale/implementation, high earnings expectations, and DC Policy volatility," he added. "More 'Scares' are inevitable."
