Ed Yardeni reaffirmed an S&P 500 target of 8,250 by the end of 2026, arguing the rally rests on earnings rather than hype. The Yardeni Research president pointed to accelerating U.S. corporate profits and a cooling but still-expanding labor market to back the call.
Ed Yardeni is not backing down from the AI bubble debate. Speaking on Squawk Box, the Yardeni Research president reiterated an S&P 500 target of 8,250 by the end of 2026, leaving room for a double-digit second-half rally if his math holds. He argues the current rally rests on earnings, not valuation and hype.
Earnings, not FOMO
Yardeni sums up the tape as FEMA — “fabulous earnings momentum” — rather than FOMO. According to 24/7 Wall St.: “This market’s got earnings power behind it, not just valuation and hype,” he said. The macro data lines up with that view. Bureau of Economic Analysis figures show total U.S. corporate profits reached $4,426.5 billion in Q1 2026, up 12.8% year over year and an acceleration from 9.6% in Q4 2025. Information technology profits climbed to $352.5 billion, up from $271.0 billion a year earlier, which gives weight to the AI-productivity story.
The labor market is cooler but still growing. The June jobs report showed payroll growth of 57,000, roughly half the consensus forecast, while total nonfarm employment rose to a record 158.984 million. Yardeni noted that the three-month average gain of 111,000 jobs stays above the break-even pace needed to keep up with labor force growth, suggesting recession fears remain contained.
The math behind 8,250
Yardeni walked through the arithmetic. Analysts project S&P 500 earnings of $400 a share next year, and they have been raising that number. Apply the current 20x multiple to that figure and you get 8,000; because Yardeni expects earnings to run hotter than consensus, he rounds up to 8,250 by year-end.
Valuation stays the key variable. His outlook implicitly assumes Treasury yields stabilize rather than move materially higher and that earnings estimates keep improving through the fourth quarter.
A call that runs to 2030
Yardeni extends the thesis beyond next year. He said the index could reach 10,000 by the end of the decade under his “roaring 2020s” framework, with autonomous transportation joining AI as the productivity catalyst. He has also argued that any meaningful pullback would represent a buying opportunity rather than a reason to drop the bullish thesis.
Whether the 8,250 target holds turns on a few clear conditions: consensus 2027 earnings estimates continuing higher, the 10-year Treasury yield holding near current levels, and AI productivity gains showing up as revenue growth outside the technology sector. Should one or more deteriorate, investors are likely to reassess whether a 20-times earnings multiple stays justified.
Source: 24/7 Wall St.
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