Will the Stock Market Soar or Crash in 2025? Most Wall Street Analysts Share This Opinion.

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Will the Stock Market Soar or ****** in 2025? Most Wall Street Analysts Share This Opinion.

The S&P 500 (SNPINDEX: ^GSPC) rocketed 23% in 2024, marking the second consecutive year in which the benchmark index gained more than 20%, something it last did in 1998. Factors contributing to that upside include strong economic growth, robust corporate earnings, and excitement about artificial intelligence (AI).

Most Wall Street analysts see upside in the stock market in 2025. Here’s what investors should know.

In aggregate,

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companies are projected to report 14.8% earnings growth in 2025, an acceleration from 9.4% growth in 2024. Those earnings are expected to be high quality, meaning the increase will primarily be driven by accelerating sales growth and expanding profit margins. Sales growth is forecast to hit a three-year high in 2025, while profit margins are projected to reach their highest level in more than 15 years.

To elaborate, S&P 500 companies are projected to report 5.8% revenue growth in 2025, up from 5.1% in 2024. That would be the fastest revenue growth since 2022. Additionally, the estimated net profit margin for the index is 13% in 2025, up from 12% in 2024. That would be the highest net profit margin since at least 2008, according to FactSet Research.

The “Magnificent Seven” ran circles around the other 493 companies in the S&P 500 in 2024. While fourth-quarter financial results haven’t been announced, those seven companies are projected to report 33% earnings growth for the year, while the remaining companies are projected to report 4% earnings growth.

Analysts think that gap will narrow significantly this year, such that the 29-point spread in 2024 (33% vs. 4%) will become an eight-point spread in 2025 (21% vs. 13%). That should create good investment opportunities beyond the Magnificent Seven. Technology companies are forecast to report faster earnings growth than any other sector, but earnings are expected to increase across every sector for the first time since 2018.

Below you’ll find year-end estimates for the S&P 500 in 2025, set by different Wall Street institutions. The chart also shows the implied upside or downside from the index’s current level of 5,882. While the list is by no means comprehensive, the vast majority of analysts expect the market to move higher.

Wall Street Firm

S&P 500 Year-End Forecast for 2025

Implied Upside (Downside)

Oppenheimer

7,100

21%

Wells Fargo

7,007

19%

Yardeni Research

7,000

19%

Deutsche Bank

7,000

19%

Evercore

6,800

16%

BMO Capital

6,700

14%

Bank of America

6,666

13%

RBC Capital

6,600

12%

Barclays

6,600

12%

Morgan Stanley

6,500

11%

Goldman Sachs

6,500

11%

JPMorgan Chase

6,500

11%

Citigroup

6,500

11%

Stifel

5,500

(6%)

BCA Research

4,450

(24%)

Average

6,500

11%

Median

6,600

12%

Data source: Yahoo! Finance. Chart by author..

Story Continues

As shown above, the average year-end target for the S&P 500 implies 11% upside, while the median year-end target implies 12% upside in 2025. Those numbers aren’t as strong as what we saw in 2024 but still hint at a good year for the stock market.

However, investors should view those estimates with skepticism because Wall Street has a poor track record. For instance, the median forecast was 16% too low in 2024, 17% too low in 2024, and 23% too high in 2022.

Investor sentiment moves the stock market on a daily basis, but sentiment is determined by valuations and financial results, which are influenced by macroeconomic fundamentals like inflation, spending, and interest rates. Those factors will move the market in 2025, so investors should stay informed on the economy.

I’m cautiously optimistic. The stock market has several tailwinds at its back, including a strong economy and heavy spending on artificial intelligence. But

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, and the Federal Reserve may cut interest rates fewer times than expected in 2025, which could lead to a drawdown.

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On rare occasions, our expert team of analysts issues a

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recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

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: if you invested $1,000 when we doubled down in 2004, you’d have $480,681!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of December 30, 2024

Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money.

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has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America, FactSet Research Systems, Goldman Sachs Group, and JPMorgan Chase. The Motley Fool recommends Barclays Plc. The Motley Fool has a

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was originally published by The Motley Fool

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#Stock #Market #Soar #****** #Wall #Street #Analysts #Share #Opinion

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