Morgan Stanley’s Wilson Turns Major Bull, Forecasts a 16% Jump in the S&P 500

Morgan Stanley’s Michael Wilson has shifted into one of the most optimistic positions on Wall Street, projecting that the S&P 500 Index could climb another 16% over the next year as corporate earnings continue to strengthen.

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The firm’s chief US equity strategist now sees the benchmark reaching roughly 7,800 by the end of 2026 one of the most aggressive forecasts among strategists tracked. If achieved, it would mark the fourth consecutive year of double-digit growth for the index.

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“We are in the early stages of a new earnings expansion and a broader bull market, especially among sectors that have lagged in recent years,” Wilson wrote in a recent note to clients.

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He expects earnings per share across the S&P 500 to rise 17% in the coming year and another 12% the year after, supported by several tailwinds: stronger pricing power across many industries, efficiency gains tied to artificial intelligence, a business-friendly tax and regulatory backdrop, and a more stable interest-rate environment.

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Wilson’s outlook stands out not only for its bullishness but also for his consistency. He was one of the few strategists who maintained a positive stance back in April, even as equities stumbled following the rollout of sweeping US tariffs. That call ultimately proved prescient, with the S&P 500 powering back to record highs as President Donald Trump later eased his trade-war posture.

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Wilson’s long-term perspective has won him recognition: he ranked as the No. 2 portfolio strategist in a major investor survey this year, trailing only Piper Sandler & Co.’s Michael Kantrowitz.

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US equities are now heading into the final stretch of what has been a volatile but ultimately strong year, hovering close to all-time highs. Third-quarter results came in far better than analysts anticipated, helping reassure investors about the durability of economic growth. Confidence has held firm even as questions persist about lofty AI-driven valuations and the potential fallout from the longest US government shutdown on record.

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The S&P 500 is already up 14% in 2025, building on back-to-back annual gains of more than 20% an extraordinary run by historical standards.

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Still, not everyone shares Wilson’s enthusiastic outlook. Some strategists are urging investors to temper expectations. Peter Oppenheimer of Goldman Sachs Group Inc., for example, argues that US equities are likely to underperform their global counterparts over the next decade, largely because valuations have become stretched relative to international markets.

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Even Wilson, despite his bullish stance, points to risks that could surface in the months ahead. One immediate concern is the direction of Federal Reserve policy. If the Fed maintains a stance that is more hawkish than investors currently expect, markets could face short-term turbulence.

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Looking further out, Wilson cautioned that an economy running “too hot” could spark a resurgence in inflation an outcome that would force policymakers to keep monetary conditions tighter for longer.

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In the meantime, however, momentum remains on the side of US stocks. Corporate profitability is improving, economic data continues to hold up better than feared, and investor sentiment has stayed resilient through bouts of uncertainty. For Wilson and others in his camp, the combination of solid earnings growth, structural AI-driven productivity gains, and policy stability forms a compelling foundation for another year of market strength.

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