JPMorgan Sees S&P 500 Surging Over 10% on Strong Economic Growth and AI Demand

JPMorgan Private Bank's Kriti Gupta expects the S&P 500 to surge over 10% in the next 12 months, reaching around 8,200 by mid-next year. Despite concerns about inflation risks, Gupta believes strong economic growth and robust demand for artificial intelligence will continue to drive stock market gains.

The US economy has continued to expand, with real GDP growing at a 2.1% annualized rate in the first quarter. The job market remains strong, with an unemployment rate of 4.2% in June. AI demand is also a major driver of corporate profitability, with companies benefiting from this trend seeing very strong profit margins.

Gupta said that inflation risks are already arriving in waves, but JPMorgan does not believe they will end the stock market's long-term rally. The bank's top picks include financial stocks, which could benefit as the AI boom spreads beyond technology companies and into the wider economy.