Bank of America’s equity and quantitative strategy team predicts that the stock market rally is far from over. In a research note released on Monday, the firm set a 6,666 year-end target for the S&P 500 in 2025, representing a roughly 10.5% gain from current levels.
The bank’s bullish forecast is driven by strong economic growth expectations, with the US economy projected to grow at an annualized rate of 2.4% in 2025, higher than Bloomberg consensus forecasts for 2% growth. As a result, Bank of America favors “GDP-sensitive companies” and recommends overweighting the Financials, Consumer Discretionary, Materials, Real Estate, and Utilities sectors.
The firm’s lead strategist, Savita Subramanian, believes that more opportunities exist in stocks than in the index as a whole. She likes companies with healthy cash return prospects and a strong tie to the US economy, particularly large-cap value stocks.
Subramanian’s team is calling for a broader market rally beyond the “Magnificent Seven” tech stocks, which includes Apple, Alphabet, Microsoft, Amazon, Meta, Tesla, and Nvidia. Instead, they predict that the S&P 500 equal weight index will outperform in 2025.
The bank’s forecast aligns with other bullish predictions from RBC Capital Markets and Goldman Sachs, both of which also expect significant gains for the S&P 500 in 2025. However, Bank of America’s strategist acknowledges that there is a “close call” between the value and technology sectors, highlighting the uncertainty surrounding the market’s trajectory.
Source: https://finance.yahoo.com/news/sp-500-will-hit-6666-in-2025-with-large-cap-value-stocks-leading-the-way-bofa-171958801.html