JPMorgan: Earnings Super Cycle Will Continue to Drive U.S. Stocks Higher, With 20% Earnings Growth Expected This Year
Alina Collins
JPMorgan raised its S&P 500 target, projecting 20% earnings growth in 2026 driven by hyperscaler capex and agentic AI advances — the tech sector is still pulling the entire index higher.
What does "earnings supercycle" actually mean?
Nataliia Lipikhina, JPMorgan Private Bank's EMEA equity strategy head, says the US is in an earnings "supercycle."
In plain terms = corporate profits are not just ticking up — they are in a phase of sustained acceleration, and that phase is not over yet.
Two engines: massive capex from hyperscale cloud companies + continued progress in agentic AI. This means → money flows first into infrastructure (data centers, chips), then cascades down the AI application chain.
How strong is 20% earnings growth?
Lipikhina said JPMorgan recently raised its S&P 500 target, forecasting 20% earnings growth for 2026.
Bloomberg data confirms: the S&P 500's current reporting season is posting its strongest earnings growth in nearly five years, concentrated in big tech.
This reflects a reality: most of the index's profit growth comes from a handful of tech giants — concentration is very high.
How do you hedge the concentration risk?
Lipikhina recommends looking at sectors and regions that have recently lagged, using them to diversify away from crowded AI trades.
She flagged one specific catalyst: if tensions around Iran de-escalate, European equities and luxury stocks could benefit.
This means → a geopolitical shift could open a new outlet for capital. "Lagging sectors" are not permanently behind — they are waiting for a trigger.
Will this summer's IPO wave destabilize the market?
Markets worry that a wave of large IPOs could disrupt stability, but Lipikhina says JPMorgan's analysis shows even very large IPOs do not cause significant disruption.
Her example: a company with a trillion-dollar valuation and 10% free float listing may create some selling pressure, but that is a technical effect, not a fundamental shift.
In plain terms = new listings do divert some capital in the short term, but they do not change the broader earnings logic — "the market has enough absorptive capacity."
Content is for reference only, not financial advice.