Here’s the thing about bull markets: they’re like that friend who keeps showing up to parties and somehow always has a good time. The current bull market has been partying since late 2022, and it’s showing no signs of stopping.
As of late December 2025, the S&P 500 was up about 18% for the year, hitting all-time highs around 6,932. That follows back-to-back years of 24% and 23% returns. The Nasdaq? Up 22.3% to around 23,613. Even the Dow got in on the action with a 14.5% gain. Three years of double-digit returns is basically the stock market equivalent of winning the lottery three times in a row.
But here’s where it gets interesting. Wall Street’s crystal ball readers are split on whether this party continues into 2026. And honestly, their disagreement is pretty telling.
The Optimists Are Really Optimistic
Oppenheimer is basically the cheerleader of the bunch, predicting the S&P 500 will hit 8,100 by year-end 2026—that’s a 17% gain from current levels. Morgan Stanley is slightly more measured at 7,800 (12.5% gain), while JP Morgan sits right in the middle with 7,500 (8% gain). All three are betting on strong corporate earnings, AI-driven efficiency gains, and favorable policy tailwinds.
The logic is solid: companies are making more money, AI is making them more efficient, and the Fed might cut rates. That’s basically the recipe for stock market success.
Then There’s Bank of America
BofA is the skeptic at the party, predicting just 7,100 for year-end 2026—a measly 2.6% gain. Their head of US Equity Strategy, Savita Subramanian, thinks we’re shifting from a consumption-driven bull market to a capital expenditure-driven one. Translation: the easy money might already be made.
The Valuation Elephant in the Room
Here’s what nobody’s really comfortable talking about: valuations are absolutely bonkers. The Shiller P/E ratio is near all-time highs at 40.59. The Nasdaq 100’s P/E is around 34. These aren’t exactly bargain-basement prices. Tech stocks have already had a massive run, and the question everyone’s asking is whether there’s more juice left in the orange.
The real wildcard is AI. If it delivers on the hype and actually drives meaningful earnings growth, then valuations might be justified. If it doesn’t? Well, that’s when things get interesting in a not-so-fun way.
The Bottom Line
The bull market has been on a three-year tear, and most of Wall Street thinks it keeps running in 2026. But the range of predictions—from 2.6% to 17%—tells you everything you need to know: nobody really knows. What we do know is that valuations are stretched, earnings need to keep growing, and AI needs to deliver. If all three things happen? The party continues. If not? Well, that’s when you find out who’s been swimming naked.
