AI-Driven S&P 500 Could Hit 9,000 If Frenzy Mirrors Internet Boom

The S&P 500 index has seen significant growth in recent times, fueled by the artificial intelligence boom. Despite the benchmark nearing 8,000, experts believe that the full potential of AI adoption is still undervalued on Wall Street.

In August, the S&P 500 saw unprecedented gains as a positive Q2 earnings season helped alleviate investor capex fears. The recent earnings season was seen as a major test of investor confidence in the scale of the AI boom. Spending among leading hyperscalers like Alphabet (GOOG), Amazon (AMZN), Microsoft (MSFT), and Meta (META) is set to reach $725 billion in 2026, up 77% from last year's record outlay.

JPMorgan analysts have raised their year-end forecasts for the S&P 500 to reach 8,000, up from 7,800. However, some experts believe that this may be just the beginning, with Morgan Stanley insights suggesting that the artificial intelligence boom could add between $13 trillion and $16 trillion in long-term market value to the S&P 500.

Evercore ISI strategist Julian Emanuel has predicted that if the AI frenzy mirrors the internet boom of the late 1990s, then 9,000 could soon be within reach for the index. However, Emanuel also warned that such exponential growth would be accompanied by large market corrections along the way.