S&P 500 posts 50.8% Q2 EPS growth, driven by AI investments, with bullish outlook for 2026.

The S&P 500 showed remarkable earnings growth in Q2 2026, with earnings per share rising 50.8%, largely due to non-operating investment gains and AI-related capital expenditures. Despite a reasonable forward price-to-earnings ratio of 20.7, the market remains vulnerable if earnings growth slows to 10-20%, highlighting the need for careful risk management. The analyst has adopted an ultra-bullish stance, increasing long-term holdings and targeting an index level between 8150 and 8500 by year-end, provided technical support holds. This outlook contrasts with last year's expectation of a mid-term correction before a rally in 2027.