BoA "S&P 500 to rise 10% more... Year-end forecast 6666"

Bank of America (BoA), a leading investment bank on Wall Street, forecasted that the S&P 500 index will reach 6666 by the end of next year. This implies an additional upside potential of about 10%. In particular, BoA also recommended investing in individual stocks rather than the index itself.

Reuters Yonhap News

On the 2nd (local time), BoA presented a year-end 2025 S&P 500 index target of 6666 in its research report. This is approximately 10% higher than the S&P 500 closing price of 6047.15, which hit an all-time high that day.

Savita Subramanian, head of BoA’s equity strategy team, predicted that the New York stock market rally will continue next year, supported by solid U.S. economic growth. She also forecasted that this rally will extend beyond the so-called 'Magnificent 7' tech stocks such as Apple, Nvidia, and Tesla, to the remaining 493 companies in the S&P 500 index.

Subramanian especially noted, "We see more opportunities in individual stocks rather than the index," adding, "Specifically, we prefer large-cap value stocks with strong cash profitability prospects that are linked to the U.S. economy." By sector, she highlighted financials, consumer discretionary, materials, real estate, and utilities. These stocks are expected to benefit from deregulation, expanded deals including mergers and acquisitions (M&A), and infrastructure investments following the inauguration of President-elect Donald Trump in January next year.

On the same day, Subramanian appeared on CNBC and said, "This could be the start of a strong manufacturing theme," predicting that corporate investments will expand not only in artificial intelligence (AI) technology but also in related infrastructure development. She pointed out that a 'perfect environment' is being created for cyclical stocks to perform well over the next few years due to reshoring and other factors.

Furthermore, while acknowledging market concerns that the so-called 'Trump tariffs' could push the global economy into a recession, she emphasized that this aspect could actually support the robust growth of the U.S. economy. She added, "People see the glass as almost empty, but I feel it can overflow," and said, "To exaggerate slightly, the U.S. economy is at a point where it could be surprisingly strong. This implies inflation and a weakening outlook for Federal Reserve (Fed) rate hikes, but it is also a positive factor." Earlier, BoA’s economic team projected a U.S. economic growth rate of 2.4% annually next year, exceeding Bloomberg’s consensus forecast of 2%.

BoA’s target of 6666 ranks among the highest forecasts tracked by Yahoo Finance from major Wall Street investment firms, following Yadani Research and Deutsche Bank (7000) and BMO Capital (6700). Previously, Yadani Research and Deutsche Bank also predicted that the S&P 500 index would reach 7000 by the end of next year, citing solid U.S. economic growth and the launch of a business-friendly second Trump administration as reasons. Additionally, the forecasts from Morgan Stanley, Goldman Sachs, and J.P. Morgan are each 6500.

This content was produced with the assistance of AI translation services.