Morgan Stanley equity strategist Michael Wilson projects that the S&P 500 could reach 7,200 by mid-2026. Wilson attributes this potential rally to a "rolling recovery" in corporate earnings, solid earnings per share (EPS) growth, and supportive macroeconomic trends including artificial intelligence adoption and a weaker U.S. dollar. This forecast aligns with recent earnings data showing that approximately 82% of S&P 500 companies have reported positive EPS surprises for the second quarter of 2025, marking the highest percentage since the third quarter of 2021. The S&P 500 has posted a 10.3% earnings growth rate for Q2 2025, representing the third consecutive quarter of double-digit growth. Meanwhile, Oppenheimer has raised its year-end target for the S&P 500 to 7,100 from 5,950, reflecting increased optimism on Wall Street. Despite the strong earnings growth, some analysts note that the S&P 500 trades at a high cyclically adjusted price-to-earnings (CAPE) ratio of 38 times, and real earnings growth after inflation is approximately 3%, suggesting valuations remain elevated. Overall, the combination of improving earnings momentum and favorable macro trends underpins the bullish outlook for the S&P 500 over the next year.