U.S. investment bank Goldman Sachs (GS) has raised its target for the benchmark S&P 500 index for a third time this year.
Analysts at Goldman Sachs, led by David Kostin, say they now expect the S&P 500 to reach the historic level of 6,000 within the next three months, or by year’s end.
The bank previously had a year-end target of 5,600 on the S&P 500 and didn’t expect the index to reach 6,000 for at least another 12 months.
Goldman cited stronger-than-expected earnings as the main reason for its upgrade to the S&P 500, which is an index comprised of the 500 largest U.S. stocks based on market capitalization.
Analysts at the bank said in a note to clients that they expect $268 U.S. of S&P 500 earnings per share (EPS) in 2025, and $288 U.S. EPS in 2026.
The team at Goldman said they are also bullish on margin expansion among publicly traded U.S. companies. They expect profit margins to rise to 12.3% in 2025 from 11.5% this year.
Goldman Sachs previously expected 24 basis points of margin expansion in 2025 compared to 78 basis points now.
Finally, the analysts are forecasting a recovery in the semiconductor trade, as well as increasing strength in mega-cap technology stocks in the coming months.
They said they foresee “…strong ongoing AI demand that should benefit these stocks.”
Goldman Sachs’ stock has increased 28% so far this year to trade at $495.16 U.S. per share.