Will the S&P 500 (SPX) reach 15,000? Tom Lee from Fundstrat Global Advisors seems to think so and predicts that this will happen by 2030. On Bloomberg’s “Odd Lots” podcast, Lee said he believes that if the S&P 500 follows a typical cycle based on demographics, this significant growth is achievable by the end of the decade.
He expects a 20% annual increase from now until then, with earnings growth contributing 12% to 15% of that total. The remaining growth will be caused by a rising valuation multiple (higher price-to-earnings ratio). Since businesses have shown incredible resilience through challenges like COVID-19 over the past several years, Lee argues that stocks deserve higher P/E multiples now.
He also pointed to the rapid adoption of AI and its potential for significant revenue growth, especially given the current labor shortage.
Lee mentioned that Fundstrat’s 2024 year-end target of 5,200 might be conservative and expects an update in about two weeks. It’s worth noting that Lee predicted that the S&P 500 would finish 2023 at 4,750 last year. The index ended up closing at 4,769.83, which, in the world of Finance, was a very accurate result.
It’ll be interesting to see if he can replicate a similar result this year, especially as uncertainty among other analysts grows. In fact, Barry Bannister from Stifel noted last week that the S&P 500 might fall to around 4,800 by mid-2026. This scenario would make Lee’s 15,000 target by 2030 a lot more difficult to achieve.
Is SPY a Buy Right Now?
Overall, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 403 Buys, 93 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 15.3% year-to-date rally, the average SPY price target of $605.38 per share implies 10.91% upside potential.
