Veteran Investor Bets Big On S&P 500 Hitting 7,000 By End Of 2025: These Sectors Could Lead The Charge

Veteran Wall Street investor Ed Yardeni is doubling down on one of the Street’s most optimistic forecasts, projecting the S&P 500 to hit 7,000 by the end of 2025.

In a Friday newsletter, Yardeni reinforced his bullish outlook, positioning himself at the forefront of high-stakes predictions for the index’s 2025 gains.

“We’ve been bullish on the stock market since October 2022. We remain bullish, targeting 7000 on the S&P 500 by the end of next year. That puts us near the head of the pack,” he said.

Oppenheimer sets its sights on an even loftier 7,100, while major investment bank firms, including Goldman Sachs, JPMorgan, and Morgan Stanley, hover around 6,500.

But will the market’s stars align or are we looking at overly rosy predictions?

Top 10 Wall Street’s 2025 Year-End S&P 500 Predictions

Yardeni’s Roaring 2020s Scenario

Yardeni’s optimism stems from a “Roaring 2020s” scenario fueled by productivity gains, GDP growth of 3.0%-3.5%, and inflation cooling near 2.5%.

Earlier in November, he issued a bold prediction: the S&P 500 – as tracked by the SPDR S&P 500 ETF Trust SPY – could climb to 10,000 by the end of the decade, buoyed by Donald Trump‘s return to the presidency.

“We believe Trump 2.0 represents a major regime change that’s bullish for the economy and stocks,” Yardeni said.

Hr also anticipated a significant boost to corporate profit margins, driven by the proposed reduction in the corporate tax rate from 21% to 15%, coupled with tax breaks on individual income from tips, overtime and Social Security.

While much of the recent earnings growth has been dominated by the tech sector’s “Magnificent 7,” Yardeni foresees a broader rally on the horizon.

“We expect to see a broadening of the companies and industries for which analysts raise their sights in 2025,” he said.

Earnings: The Backbone Of The Rally

Yardeni forecasts operating earnings per share (EPS) for the S&P 500 to hit $285 in 2025 – an 18.8% year-over-year jump, far above the Street’s consensus of $270.

“We’re leading the pack on EPS outlook,” Yardeni stated, attributing the growth to a record profit margin of 13.9% and rising revenues per share, which are projected to climb 5.1% to $2,050.

Wall Street analysts expect robust earnings growth of 14.3% for 2025, up from the estimated 10% for 2024.

Sector Winners And Losers: Tech Takes Retains The Crown

Tech continues to dominate, with the Information Technology sector predicted to post EPS growth of 21.7% in 2025, up from 20.4% in 2024, according to consensus estimates.

Analysts also expect a rebound in Health Care, with EPS growth accelerating from 5.0% this year to 20.1% in 2025. Pharmaceuticals and Biotechnology are key drivers, with EPS expected to soar 33.1% and 30.9%, respectively.

The Materials sector is gearing up for a strong rebound, expected to shift from an 8.2% EPS decline in 2024 to an impressive 18.3% growth in 2025.

Similarly, Industrials are set to thrive, fueled by Boeing’s return to profitability and surging growth in key industries such as Copper, projected to rise by 37.6%, Commodity Chemicals by 33.1% and Construction Materials by 24.8%.

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