(Bloomberg) -- Gains in the shares of American technology giants are likely to keep pushing the S&P 500 Index to new highs, says Citigroup Inc.’s Scott Chronert.

The bank’s US equity strategist boosted his year-end forecast for the stock benchmark on Monday, to 5,600 from 5,100. He cited continued strength in the so-called Magnificent Seven stocks and expectations for earnings growth to extend to other S&P 500 companies. The index rose about 1% Monday, on pace for its 30th record close this year, with Apple Inc. among the leaders.

Citigroup is the third firm since Friday’s close to lift its forecast for the gauge, joining Goldman Sachs Group Inc. and Evercore ISI as US stocks keep climbing to records. The trio are now among the most bullish on Wall Street, projecting an advance of some 2% or more from current levels, while the average forecast calls for a decline.

“The weighting effect of the mega-cap growth cohort is exerting an outsized influence on index price action,” Chronert wrote in a note to clients. The traditional measures to set targets, based on the macroeconomic backdrop, seem “inappropriate,” he said.

Strength in the economy and corporate earnings, and optimism that the Federal Reserve will reduce interest rates this year, have once again spurred a chase among Wall Street forecasters to keep up with a rally that left their forecasts in the dust early in 2024. 

At around 5,480 on Monday, the S&P 500 is up around 15% this year, and is well above the average year-end target of 5,275.18 for strategists tracked by Bloomberg. That’s even after a wave of firms ratcheted up their calls. Some, like Goldman and UBS Group AG, have done so as often as three times. The rush to turn bullish echoes last year, when the S&P 500’s double-digit return caught Wall Street prognosticators off guard.

Chronert and his team also raised their estimate for the index’s per-share earnings in 2024 to $250 from $245, while initiating a 2025 estimate of $270. Citigroup published mid- and full-year S&P 500 targets for next year of 5,700 and 5,800, respectively.

“Inherent in these targets is an assessment of three influences: Nvidia Corp., other Magnificent Seven stocks, and the remainder of the index,” they said, adding that valuations can hold into year-end but are likely to compress in 2025. An index tracking the Magnificent Seven stocks — Amazon.com Inc., Nvidia, Apple, Microsoft Corp., Alphabet Inc., Tesla Inc. and Meta Platforms Inc. — is up 37% this year.

Citigroup’s upgrade comes after Evercore’s Julian Emanuel raised his year-end S&P 500 forecast to 6,000 on enthusiasm over artificial intelligence, in an about-face from his previous target of 4,750, which called for a correction before 2024 closes out.

On Friday, Goldman’s chief US equity strategist, David Kostin, boosted the firm’s year-end S&P 500 target for a third time, a month after he said he saw no room for upside in the benchmark. JPMorgan Chase & Co. has the gloomiest outlook for the gauge at 4,200, implying a drop of more than 20% from the current level.

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