The S&P 500 (^GSPC) has hit multiple record highs in 2025, but one Wall Street research firm argues the real ceiling is even higher.
Trivariate Research, led by veteran strategist Adam Parker, said the benchmark index could reach 10,000 before the end of the decade. The bold bet is linked to earnings growth, high margins, and sustained investor appetite for AI-fueled companies like Microsoft (MSFT).
“No question, it’s achievable,” Kenny Polcari, chief market strategist at SlateStone Wealth, told Yahoo Finance. “Do I think there will be bumps along the way? Absolutely. But by 2030, I think we could see the S&P 500 hit 10,000.”
The index currently sits around 6,250 and is up 6.5% on the year.
In Trivariate’s note to clients, Parker pushed back on skepticism surrounding the market’s lofty valuation and whether profit margins can keep expanding. The key lies in productivity, and the investments companies have already made to boost it.
“We are willing to underwrite 10-11% per year earnings per share growth as an annual average between now and the end of 2030,” Parker wrote. That’s just slightly above the long-term S&P average of 9% but enough to drive significant index gains.
Polcari said the growth projection is ambitious, “but not without precedent.” Accelerating AI and productivity gains could make that kind of earnings growth feasible, he explained.
There are already tangible signs of AI-driven productivity gains, per Parker. Microsoft recently said it saved more than $500 million by using AI tools in its call centers.
That kind of efficiency story will spread across the S&P 500, Parker said, particularly as more companies look to cut costs and boost margins without sacrificing growth.
That said, the forecast isn’t without risks. Pushback from investors largely centers around whether profit margins are already near record highs and if a rise in interest rates could cause price-to-earnings multiples to contract.
Read more: What experts say about the possibility of additional rate cuts
Parker acknowledged both points and flagged a possible “growth scare” between August and October, but he insisted those won’t derail the long-term trend. One underappreciated factor is that many parts of the market have been in a margin and earnings slump.
Five of the 11 GICS sectors, including Consumer Discretionary, Energy, and Industrials, are expected to post year-over-year earnings declines in Q2. A rebound in those areas could lift overall EPS, even if highfliers in tech start to moderate.
Another argument is that investors are applying outdated valuation logic. The long-term average price-to-forward earnings ratio is 17x compared to 22x today, but today’s margin structure is higher than that of yesteryear. More than 40% of the total market cap of the top 3,000 US stocks now boast gross margins over 60%, according to Trivariate, an environment that justifies higher multiples.
Parker is also recommending investors overweight large-cap sectors like technology, financials, and healthcare, with the latter view as a “contrarian” AI beneficiary in the coming years.
Of course, hitting 10,000 on the S&P 500 won’t happen in a straight line, and any number of shocks could test investor conviction along the way.
“AI and technology are still in their earning innings, and they’ll continue driving efficiencies across sectors,” Polcari said. “That’s what can pull everything higher.”
Francisco Velasquez is a reporter for Yahoo Finance. He can be reached on LinkedIn and X.
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