Societe Generale has reaffirmed its bullish outlook for U.S. equities, arguing that corporate earnings strength is becoming increasingly widespread rather than remaining concentrated in large technology companies. The bank continues to forecast the S&P 500 reaching 8,000 and advises investors to “buy the momentum dip.”
Corporate Results Continue to Impress
Chief U.S. Equity Strategist Manish Kabra called the current reporting season “another stellar earnings season,” highlighting that roughly six in ten companies have released results, with only 9% failing to meet expectations, “the lowest reading ever.”
SocGen estimates that 86% of companies have exceeded earnings forecasts, while profit margins have expanded across all but one sector. Both overall S&P 500 margins and margins excluding technology have climbed to record levels.
Analysts Are Becoming More Optimistic
The bank also noted that earnings winners continue to outperform the wider market, even after momentum moderated during the reporting season. Companies missing expectations have continued to lag.
Positive analyst revisions remain strong, with upgrades comfortably exceeding downgrades by a ratio of 15 to 10. Technology, financials and industrials continue to lead improvements, while SocGen has lifted its 2026 S&P 500 earnings forecast to $335 per share.
AI Spending Shows No Signs of Slowing
SocGen believes artificial intelligence remains a major long-term growth driver.
The bank said the “hard data” is accelerating, citing stronger cloud growth from the leading hyperscale providers, a $300 billion increase in order backlogs and an additional $150 billion in planned capital expenditure.
Industrials also stand out, with record profit margins and improving earnings revisions. Large-cap industrial earnings are forecast to rise by 15%, while small-cap companies are expected to deliver around 30% growth.
Equal-Weight Stocks Remain the Preferred Trade
According to Kabra, earnings growth is becoming increasingly diversified across the market. He described the record performance of the S&P 500 Equal Weight Index as “a testament to this,” with cycle drivers “still running hot.”
While higher real yields and elevated leverage could restrict further valuation expansion, SocGen believes a major correction would require substantially tighter monetary policy alongside an inverted yield curve—an outcome it does not currently anticipate.
As a result, the bank continues to favour the equal-weight S&P 500 and maintains its 8,000 target for the benchmark index.
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