On September 8, HSBC raised the target of the S&P 500 index for the end of 2026 from 7,650 points to 8,100 points, which is in line with the target announced by Citibank in June. Both investment banks regard artificial intelligence capital expenditure and corporate profit growth as the main support, but the two investment banks do not have the same assumptions about profit and valuation. Citigroup raised its 2026 earnings forecast for the S&P 500 index from $320 to $350 in June, and raised its year-end target from 7,700 points to 8,100 points. Based on 8,100 points and $350 EPS, the corresponding implied price-earnings ratio is about 23.1 times. Citi also gave a preliminary forecast of earnings of $400 per share for 2027. HSBC now predicts that the earnings per share of the S&P 500 index will increase 33% year-on-year to $360 in 2026, corresponding to the target of 8,100 points with a price-earnings ratio of 22.5 times. The bank expects earnings per share to increase by more than 25% in the second half of the year, using second-quarter financial statements, continued upward profit expectations, and AI capital expenditure as the main basis for the upward target. This means that although both investment banks eventually set a target of 8,100 points, the path to achieving it is different: HSBC uses higher profit forecasts and lower valuation multiples, while Citibank's profit assumption for June is lower, and tolerance for valuations is relatively higher.

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