Wall Street’s bullish outlook for stocks is tied to the growing influence of artificial intelligence. Strategists from Wells Fargo, Barclays, and Deutsche Bank have raised their S&P 500 targets, with Deutsche Bank being the most optimistic at 7,000 for 2025. The index was trading near 6,540 on Wednesday.

Deutsche Bank’s Binky Chadha sees the rally broadening to more cyclical sectors, while Wells Fargo and Barclays have also raised their outlooks. Even with concerns of “froth” in the market and potential economic risks, strategists remain cautiously optimistic, citing the strong AI investment cycle.

The market’s recent surge off the April lows has led to record levels, with the S&P 500 up 11% this year. The Nasdaq Composite and Russell 2000 have also seen gains. Optimism about Federal Reserve cuts and corporate earnings growth, supported by AI, data center spending, and software adoption, is driving the market’s momentum.

Oracle’s optimistic AI-fueled cloud revenue projection caused its shares to surge more than 30%. Analysts point to AI as a key driver of future growth, with the potential for significant earnings increases. The consensus remains cautiously optimistic amid market highs and potential economic headwinds like labor market cracks and inflation.

Read more at Yahoo Finance: Wall Street strategists pile on S&P 500 upgrades as AI mania bolsters ‘glass-half-full’ view of US economy