The S&P 500 Index is looking at a double-digit increase in the second half of the year, powered by the resilient strength of America’s technology behemoths, according to Wells Fargo Securities LLC’s Christopher Harvey.

The bank’s top US equity strategist is Wall Street’s biggest bull, with a year-end price target on the S&P 500 of 7,007, set in December. He’s sticking to his call, implying an 11% gain from Monday’s closing price of 6,305.60. His view is that Big Tech companies, which have been instrumental in the equity gauge’s 27% surge since its April low, will keep the stock market soaring regardless of President Donald Trump’s ever-changing trade policies.

“What we’re seeing is the winners continue to win,” Harvey said Monday in an interview on Bloomberg Surveillance. “The uber-cap companies have the higher margins, are gaining more market share. There is a real secular trend in AI that will continue.”

Basically, it’s a continuation of the current trend, since technology giants have been fueling the latest bull market for months despite all the global uncertainty, with the Magnificent Seven high-flyers soaring 42% since April 9, when Trump announced a pause in most of his global tariffs.

Rally skeptics are concerned about valuations going too far. But Harvey says that the index’s concentration around a few fast-growing tech firms insulates it from broader economic trends. Just five stocks — Nvidia Corp., Microsoft Corp., Apple Inc., Amazon.com Inc. and Meta Platforms Inc. — account for more than a quarter of the S&P 500’s performance.

“The S&P is not the same as it was 25 years ago,” he said. “It is much stronger, the fundamentals are much better today than they were back then.” In particular, the index’s leaders are “more growthy, more techy,” productivity is better and managements are more skilled, he added.

Big Tech’s strength will be on full display over the next few weeks as they begin unveiling their quarterly earnings. Two of this year’s laggards among the Magnificent Seven — Tesla Inc. and Alphabet Inc. — are on deck this week.

The lion’s share of S&P 500 earnings growth continues to come from beneficiaries of advancements in artificial intelligence. The Magnificent Seven companies are expected to post a combined 14% rise in second-quarter profits, while earnings for the rest of the S&P are predicted to be relatively flat, according to Bloomberg Intelligence data.

Harvey was one of few Wall Street prognosticators to correctly stick to his guns throughout April’s volatility, predicting big stock-market gains as many of his competitors rapidly downgraded their outlooks before having to change course again as the market jumped back to new highs. His confidence in tech’s durability, and his understanding of Trump’s penchant for speaking loudly about trade issues but pulling back on his most extreme ideas, were the main reasons he stuck with his call.

“We had seen Trump 1.0,” Harvey said. “We know his style — it’s to go out to the nth degree and then to come back in.”

Heading into 2025, Harvey predicted that a favorable macroeconomic backdrop and easing monetary policy would keep US equities soaring after back-to-back years of 20% gains in 2023 and 2024.

The S&P 500 is trading at another all-time high on Monday after notching seven new records since late June. The torrid run has come in spite of uncertainty from tariffs, economic growth, inflation and the Fed’s rate-cut plans.

Harvey acknowledged that there are very real market risks, from the administration’s attacks on Fed Chair Jerome Powell and what tariffs will mean for interest rates and inflation when Trump’s pause ends. But so far, the positives in the market offset those worries, he said.

“We’re starting to see M&A activity kick up,” Harvey noted. “We do think the Fed is going to cut, fundamentals are fine, the consumer is okay.”

Written by: Alexandra Semenova — With assistance from Jonathan Ferro, Lisa Abramowicz, and Annmarie Hordern @Bloomberg

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