Yardeni Research President Ed Yardeni sees the S&P 500 at 8,400 by mid-2027 despite AI credit stress. Earnings carry that call, while rising yields and oil weigh on valuations, leaving his year-end target at 7,900.
However, Yardeni told CNBC’s Squawk Box that 8,400 looks more realistic by mid-2027 than by this year’s end. He blames valuation pressure, not weaker profits.
What Gets the S&P 500 to 8,400 by Mid-2027?
Profits anchor his call. Yardeni expects S&P 500 earnings of $425 a share next year, he said on CNBC.
Analysts now see about $500 a share in 2028, roughly two years earlier than he expected.
Valuations are the sticking point. Yardeni says rising yields and oil weigh on the multiple, the price investors pay per dollar of earnings.
Bond yields started moving toward 5% in mid-September, he said, and oil climbed back to $100. One yield spread already shows Treasuries beating stocks.
He expects the Federal Reserve to deliver two more rate increases by year-end or early next year.
Even so, a year-end rally remains possible, and he still targets 10,000 by the end of the decade.
Can AI Credit Stress Derail the S&P 500 at 8,400?
CoreWeave (CRWV) rents Nvidia chips to AI developers. Its shares fell about 15% on October 14 as bond yields neared 15%, CNBC reported.
Yardeni calls the repricing a positive. Weaker credits now pay more, which he says could slow them and lower bubble risk.
He adds that the 1999 and 2000 bubble comparison no longer fits.
Meanwhile, Gartner warns that more than $3.5 trillion of AI infrastructure spending could face write-downs by 2030. That assumes capital spending holds its current pace.
Data center owners would need $8.5 trillion in revenue through 2030 to cover spending and returns, Gartner says. It forecasts $3.6 trillion at most.
Neoclouds, the specialized AI cloud providers like CoreWeave, rank among the most exposed.
Fundstrat’s Mark Newton, by contrast, urges buying the tech dip but staying diversified.
Yardeni says he will watch cloud revenue and backlog at big spenders such as Amazon and Meta.
Those figures will test whether revenue can outrun the AI debt that bond investors are now repricing.
