July 21, 2024

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Stock market outlook: S&P 500 could soar to 15,000 by end of decade

2 min read

Fundstrat Global Advisors cofounder Tom Lee was among the few voices on Wall Street last year who predicted a stock market surge while most of his peers saw a slump amid widespread expectations for a recession.

But he—and the U.S. economy—proved the doomsayers wrong. In fact, among the forecasters surveyed by Bloomberg, Lee’s call in 2023 turned out to be the most accurate.

And this year, he’s still calling his shots and nailing them. In early June, he said the S&P 500 would hit 5,500 by the end of the month. As of Friday’s close, it was at 5,464.62.

Now, he’s got a longer-term forecast, and it’s a whopper: by the end of this decade, Lee said the S&P 500 could hit 15,000, representing upside of more than 170%.

On a recent episode of Bloomberg’s Odd Lots podcast, which was recorded on Tuesday, he began by explaining his evidence-based approach to forecasting, which looks across history and across assets. He said the bond market is smarter than the stock market: “That’s why they say equities are the land of C students.”

He also believes investors can’t fight the Federal Reserve and focuses more on themes that will drive growth, such as how millennials are reshaping the economy, the global labor shortage that will boost AI and tech stocks, as well as energy security and cybersecurity. By picking the strongest stocks within each theme, he has outperformed the market every year since 2019, Lee said.

Wall Street typically underestimates the impact of new technologies, which are usually adopted first by younger people in their teens and 20s while most top investment professionals are in their 40s and 50s, he added, noting that cell phones were initially dismissed as toys for the rich. Something similar is happening with AI.

“The adoption rate of AI is staggering, but the use case is important because there’s a labor shortage,” Lee said. “So to me, I think it’s very likely we’re underestimating how much revenue…

Jason Ma

2024-06-23 15:44:05

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