UBS: The tech bull market is expected to continue reaching new highs next year, with the S&P 500 index projected to rise to 7,500 points

The market is recently concerned about the high valuations in the artificial intelligence sector, but UBS expects that the tech bull market in the U.S. stock market will reach new highs again next year.

Arend Kapteyn, Head of Global Economics and Strategy Research at UBS, pointed out in a report that the S&P 500 index is forecasted to rise to 7,500 points next year, an increase of about 12%, mainly driven by approximately 14% corporate earnings growth, with nearly half of the growth coming from the tech sector.

He warned that the market may experience slight negative impacts due to high valuations, as current corporate earnings expectations and valuation levels are at their highest in nearly 40 years. However, he expects that starting from the second quarter, the market will see broader and stronger growth. The market may enter a consolidation phase, with high-quality stocks outperforming the broader market; by the end of the first quarter next year, the upward trend will extend to low-quality cyclical stocks.

He added that looking ahead to 2026, the global economy will continue to grow, but due to tariff measures pushing up U.S. prices and affecting global exports, a brief economic slowdown will be faced in the next four to five months