Goldman Sachs: Valuation of tech giants is far from a bubble, SPDR S&P 500 may rise another 15% this year, breaking through 6000 points!
Most institutions have raised their expectations, but analysts at Morgan Stanley and JPMorgan Chase remain "very pessimistic"
Since the beginning of the year, Pro UltrPro Shrt S&Pro 500 has accumulated nearly a 10% increase, surpassing the year's initial forecasts of most market strategists. Recently, Goldman Sachs also updated their views.
In their latest report, Goldman Sachs strategists reiterated their year-end index expectation for Pro UltrPro Shrt S&Pro 500 at 5200 points, but introduced another possibility - that leading technology companies could push the index to a new level by the end of the year, reaching 6000 points. The strategists wrote in the report:
"Although optimism about artificial intelligence (AI) seems high, the long-term growth expectations and valuations of the largest TMT stocks are still far from the 'bubble' territory."
Despite the pressure on certain sectors due to rising long-term interest rates and capital costs, Goldman Sachs believes that this is a key factor that could further boost stock prices. The team further explained:
"If there is a positive adjustment in the interest rate outlook without harming the overall economic conditions, it could provide momentum for a broad market rebound."
Furthermore, Goldman Sachs also predicted several other scenarios that could affect the index's trend. If market valuations could return to pre-pandemic levels, then by the end of the year, Pro UltrPro Shrt S&Pro 500 could reach 5800 points.
In a more pessimistic "struggling" forecast, if optimistic sales growth expectations are not met, or if the market begins to anticipate the risk of an economic downturn, the index could fall to 4500 points.
Most institutions raise their expectations
As the curtain rises on 2024, Wall Street generally holds a cautiously optimistic view on the future performance of US stocks, expecting steady and subdued growth after the unexpected prosperity of 2023.
However, this cautious atmosphere has been shattered by the resurgence of artificial intelligence technology and the Federal Reserve's clear signals on inflation - Pro UltrPro Shrt S&Pro 500 continues to hit new highs, while the Nasdaq and Dow Jones indices are also soaring - everything seems to suggest that market momentum remains strong.
This unexpected stock market frenzy has forced Wall Street forecasters to reassess their views on future trends, with many Wall Street investment banks raising their year-end outlook for Pro UltrPro Shrt S&Pro 500.
Among them, the optimistic forecast from Societe Generale of France is particularly noteworthy, as the bank has raised its year-end target price to 5500 points, representing nearly 5% potential upside from the current level Bank of America and Barclays strategists have also joined the optimistic camp, raising their year-end forecasts to 5400 points and 5300 points respectively, demonstrating confidence in the resilience of the economy and the profit potential of large technology stocks.
Some institutions remain cautious
It is worth mentioning that, amidst the majority of institutions raising their year-end expectations for the Pro UltrPro Shrt S&Pro 500, analysts from Morgan Stanley and JP Morgan still hold a conservative view on the year-end stock market trends.
Michael Wilson of Morgan Stanley remains one of Wall Street's most pessimistic strategists, as he reiterated last week his year-end Pro UltrPro Shrt S&Pro 500 target of 4500 points.
JP Morgan's view is even more pessimistic, with the institution predicting the Pro UltrPro Shrt S&Pro 500 to close at 4200 points by year-end