Julian Emanuel, strategist at Evercore ISI, told clients Sunday that the S&P 500 has a clear path to 9,000 over the next 12 months. The index closed Monday at 7,745, putting Emanuel's target 17 percent above current levels. His base case for year-end sits at 7,750—essentially flat from here—making 9,000 a bull scenario, not a consensus call.
The S&P 500 is up 13 percent year-to-date and trading near record highs. Emanuel's note argues that the three traditional catalysts for a bull market ending—recession, sharply rising long-term yields and investor fear-of-missing-out that has already peaked—are not present. "The traditional elements that end a Bull Market are not evident – recession, spiking long end yields, profound investor and/or capital markets FOMO," Emanuel said.
His optimism on the AI trade rests on a direct comparison to prior innovation cycles. "The 2020s AI Bull has yet to reach the heights and length of the innovation-driven Bulls of the 1990s and 1920s, while overall corporate leverage remains subdued," Emanuel said, arguing there is room to run before euphoria reaches dangerous levels. He also said that investors today are more diversified than they were heading into the 2000 collapse. "Having learned the lessons of Y2K, investors have sought diversification even as the Indices hit new highs," he said.
One concrete data point supports that argument: a record 121 stocks have moved onto Evercore ISI's "Negative Beta" tracking list—names that show an inverse statistical correlation to the S&P 500 over a trailing six-month window. PepsiCo, McDonald's, Kinder Morgan, CoStar and Gartner are among the prominent names on the list. The record size of this group indicates that asset managers are running a barbell strategy, pairing high-growth AI positions with low-correlation, steady-cash-flow names.
Evercore is not alone in moving targets higher. Citi carries a year-end S&P 500 target of 8,100. Yardeni Research is at 8,400. Emanuel's 9,000 sits above both, though all three reflect a broader upward revision driven by stronger-than-expected corporate earnings.
The key risk Evercore flags is a correlation flip. If those 121 negative-beta stocks stop moving against the index and start moving with it, the barbell breaks down. Defensive positions that were cushioning drawdowns would instead amplify them. Emanuel described the bull case as intact "Until It Isn't"—an acknowledgment that FOMO-fueled momentum is self-reinforcing on the way up and can reverse sharply.
Ray Dalio, founder of Bridgewater Associates, is not buying the soft landing. Speaking on The Diary of a CEO podcast last month, Dalio drew direct parallels between today's AI market and the bubbles of 1929 and 2000. His argument: significant technology generates genuine excitement, but investors eventually stop paying attention to valuations. "They don't pay attention to the price," Dalio said. He stressed that leverage amplifies the cycle—borrowing accelerates gains during the run-up and forces selling on the way down.
Dalio was explicit that his caution is not a bet against AI as a technology. He said he remains highly bullish on AI's long-term potential. His concern is that technological promise does not justify any price, and that the current market is showing what he called "classic signs" of a bubble.
BTIG analysts add a seasonal overlay to the risk picture. Aug. through October has historically been a weak stretch for U.S. stocks in midterm election years, the firm said. That window opens now.
The tension between Emanuel and Dalio reflects two different readings of where the AI cycle sits relative to its historical analogs. Emanuel sees an innovation bull that has not yet matched the length or excess of the 1990s run, with diversified positioning as evidence of investor discipline. Dalio sees the same enthusiasm that preceded two of the worst crashes of the past century, driven by leverage and price-insensitivity.
Emanuel's 9,000 call hinges on a specific mechanism: FOMO tied to call-option demand. Investors' appetite for upside exposure through options has historically been a late-cycle accelerant. If that demand picks up sharply, it can push indexes well above fundamental targets before reversing. Evercore's base case of 7,750 suggests the firm is not counting on that scenario—but it is putting a number on what happens if it arrives.
