Bank of America Raises S&P 500 Target to 7,400 Amid AI Strategy Shift

Key Facts

In a move reflecting growing optimism over large-cap earnings resilience, Bank of America has raised its year-end S&P 500 target to 7,400. According to reports, the bank also set a 12-month target of 7,800, driven by expectations that cloud revenue growth will outpace capital expenditures by 2027. This revision comes amid a strategic shift favoring cloud providers and hyperscalers over hardware and chip manufacturers.

As part of this strategic pivot, the bank upgraded Communication Services to marketweight, emphasizing large-scale players like Alphabet. Per market data, Alphabet (GOOGL) closed at $349.54 on September 18, 2026, while Microsoft (MSFT) stood at $493.78 and Meta at $665.75 on the same date. These levels reflect confidence in the ability of software and service giants to lead the next phase of the AI investment cycle.

Regarding financial performance, Bank of America (BAC) shares closed at $57.73 (as of September 18, 2026) alongside these bullish index projections. Looking at the economic calendar, traders are monitoring U.S. Retail Sales data, which showed 6% year-over-year growth in the latest reading, supporting the thesis of consumer strength driving corporate profits. However, the bank cautioned that inflation-driven sell-off risks may persist despite the upward targets.