Analysts See S&P 500 Falling 21% to 6,500 by 2027 as 5% Yields Threaten AI Boom
Updated
Updated · Yahoo Finance · Sep 13
Analysts See S&P 500 Falling 21% to 6,500 by 2027 as 5% Yields Threaten AI Boom
3 articles · Updated · Yahoo Finance · Sep 13
Summary
6,500 is Capital Economics' end-2027 target for the S&P 500, implying a 21% drop after a projected rise to 8,250 by the end of 2026.
James Reilly said late-stage bubble signals are piling up: valuations near dot-com extremes, forward earnings growth at bubble-era highs, narrow index leadership and a heavy pipeline of IPOs and follow-on share sales.
AI spending is a central risk because top hyperscalers' combined free cash flow is expected to turn negative in 2027, raising doubts about how long the investment surge can last.
4.97% on Friday, the 10-year Treasury yield is nearing the 5% level Ruchir Sharma says would mark a new era of tight money, making debt and equity funding harder for AI mega-projects and worsening U.S. debt strains.