Bank of America Lifts S&P 500 Target to 7,400, Upgrades Communication Services

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โดย TheStreet·US·Read original
Summary · why it matters

Bank of America's US Equity and Quant Strategy team raised its 2026 year-end S&P 500 target to 7,400 from 7,100 and set a 12-month target of 7,800, according to a note dated Sept. 18. The bank is forecasting 33% S&P 500 earnings growth in 2026 and 12% in 2027, and warned that the risk of a sell-off into year-end remains elevated because current multiples imply lower inflation than the US economy is likely to deliver. In its sector calls, the team upgraded S&P 500 Communication Services to marketweight from underweight, closing out a June 2025 downgrade that lasted 15 months; the sector is dominated by Alphabet and Meta, which together make up 78% of the S&P 500 Communication Services weight. BofA now expects cloud revenue at Microsoft, Amazon, Alphabet, and Oracle to outpace capex growth in 2027, though it flagged that uncommenced leases and non-cancellable contractual promises at the hyperscalers rose more than 50% between some recent quarters, well ahead of the more modest jump in debt on their books. Long-term earnings expectations for Info Tech now sit at 43%, an all-time high, while Comm Services growth expectations sit at 16%, which is why BofA prefers the hyperscalers over the chip trade at this level.

Impact on stocks 6

Artificial Intelligence▲ · 4 stocks
Alphabet Inc Class C
GOOG
▲ PositiveCapitalrelevance

BofA upgraded Communication Services (dominated by Alphabet and Meta) to marketweight and expects Alphabet cloud revenue to outpace capex growth.

Meta Platforms Inc.
META
▲ PositiveCapitalrelevance

BofA upgraded Communication Services, a sector where Meta and Alphabet make up 78% of the weight, to marketweight from underweight.

Amazon.com Inc
AMZN
▲ PositiveCapitalrelevance

BofA expects cloud revenue at Amazon and peers to outpace capex growth in 2027, favoring hyperscalers over chips.

Microsoft Corporation
MSFT
▲ PositiveCapitalrelevance

BofA expects Microsoft cloud revenue to outpace capex growth in 2027 and prefers hyperscalers over the chip trade.

Financials▲ · 1 stocks
Bank of America Corp
BAC
± MixedCapitalrelevance

BofA raised its S&P 500 target and upgraded Communication Services, but warned of elevated sell-off risk; the note is its own strategy call.

Cloud & Digital Infrastructure▲ · 1 stocks
Oracle Corporation
ORCL
▲ PositiveDemandrelevance

BofA expects cloud revenue at Oracle (along with Microsoft, Amazon, Alphabet) to outpace capex growth in 2027, a positive demand outlook for its cloud business.

Theme Impact 4

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