The market’s hot start to 2024 will continue thanks to a strong tech sector and a resilient economy despite high rates, according to Barclays. The bank raised its S & P 500 target to 5,300 from 4,800. The new forecast implies upside of 4.5% from Monday’s close. It’s also the second-highest target on the CNBC Market Strategist survey , just below UBS. The increase comes after the broad market index reached record highs last week, briefly breaking above 5,100 on an intraday basis for the first time. Year to date, the S & P 500 is up 6.3%, led by even more gains in tech amid excitement around artificial intelligence and the prospects of it bolstering profits. Strategist Venu Krishna noted the new forecast “reflects our view that inflation will continue to normalize while the economy remains relatively resilient, and that Big Tech will maintain leadership.” “We believe Big Tech earnings exceptionalism justifies a premium multiple for the group, while we see SPX ex-Tech as trading roughly in-line with fair value amid easing inflation headwinds and a shallower reset to economic growth,” Krishna added. The S & P 500 tech sector is up 9.6% in 2024, outperforming the 10 other sectors. The clear winner so far, much like in 2023, is Nvidia. Last week, the chipmaker reported another blockbuster quarter, with revenue up 265% on a booming AI business . Krishna also raised his full-year earnings forecast for the S & P 500 to $235 per share from $233. To be sure, the strategist said this is below consensus.
