UBS strategist sees strong US earnings boosting stocks before 2027 uncertainty

UBS projects the S&P 500 will reach 8,100 by end-2026 and 8,900 by end-2027, driven by broad-based earnings growth across all 11 sectors, with approximately 28% EPS growth in Q2 2026 and 20% for full-year 2026. The firm's US equity strategist Keith Parker highlights that AI-related capital expenditures, which fuel much of the growth, could squeeze margins beyond 2027 as return-on-investment visibility dims.

Via proactiveinvestors.com UBS strategist sees strong US earnings boosting stocks before 2027 uncertainty Keith Parker sets S&P 500 targets of 8,100 for year-end 2026 and 8,900 for 2027, driven by what UBS calls a broad-based profit surge across all sectors UBS is making one of the more aggressive calls on Wall Street right now. The bank’s US equity strategist Keith Parker projects the S&P 500 will hit 8,100 by the end of 2026 and climb to 8,900 by the end of 2027, powered by what the firm describes as a corporate earnings engine firing on all cylinders. The catch is that the visibility gets murky beyond 2027. AI-related capital expenditures, the very spending fueling much of this growth, could start squeezing margins once companies lose clarity on their return on investment. The numbers behind the bullishness UBS Global Wealth Management’s Chief Investment Office released research on July 17 laying out the case in detail. The firm expects approximately 28% earnings-per-share growth for the S&P 500 in Q2 2026, with full-year 2026 growth projected at around 20%. All 11 sectors of the S&P 500 are expected to post profit increases, with a median profit growth of roughly 12% across the board. Semiconductors are doing most of the heavy lifting. UBS forecasts the Philadelphia Semiconductor Index will deliver a staggering 92% earnings growth in 2026, followed by an additional 40% in 2027. Chips alone are expected to provide over 40% of the S&P 500’s total earnings growth. Zooming out globally, UBS sees roughly 10% upside for the MSCI All Country World Index over the next 12 months. Eurozone earnings are projected to grow 8% in 2026 and 72% in 2027, while Asia excluding Japan is expected to see 15% and 20% growth over the same periods. Why semis and AI are the fulcrum UBS acknowledges that AI-related capital expenditure visibility dims beyond 2027. Companies are currently spending aggressively on data centers, chips, and AI infrastructure, but the question of whether those investments will generate proportional returns remains unanswered at scale. What investors should actually watch The gap between Parker’s year-end 2026 target of 8,100 and his 2027 target of 8,900 implies roughly 10% additional upside over the course of next year. The Eurozone earnings trajectory is also worth monitoring. A projected jump from 8% growth in 2026 to 72% in 2027 is enormous and likely reflects specific base effects or sector-driven catalysts that could be sensitive to macroeconomic conditions. Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy https://cryptobriefing.com/editorial-policy/ .