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(This is an actual research report from Trivector’s Adam Parker, reprinted for CNBC Pro subscribers with permission. Click here to subscribe to Trivector.) Investors with whom we are speaking appear well-aware of the potential negatives for the U.S. equity market. However, this awareness seems to be taking a back seat to FOMO (fear of missing out) on the current uptrend in the market. We share in some of that optimism as we see a path to 10% EPS growth for the S & P 500 , with a low 20x price-to-forward earnings ratio – elevated versus history but justified by structurally higher margins. Why are we more bullish on the long-term and what is the case for 10,000 on the S & P 500 by 2030? We have done extensive analysis looking at the relationship between margins and multiples, showing that expanding margins can lead to multiple expansion. This, combined with our view on AI and the positive impact it can have on margins across sectors, leads us to be bullish on U.S. equities for the next 12-to-18 months. We see the S & P 500 above 7000 before the end of 2026, if not sooner. The top 50 companies are relatively immune from higher inflation, a dynamic that was made crystal clear post-COVID. These companies account for nearly 50% of the gross profit dollars of the S & P 500. Moreover, lower input costs like commodities and oil, tame logistics expenses, and a weakening dollar might all help the earnings outlook for the second half of 2025. AI productivity and revenue synergies likely help 2026 and 2027 earnings. We don’t see the market performing poorly with this as the backdrop driving double-digit EPS growth. In the table below, we show going left-to-right a range of per year EPS assumptions for the S & P 500 from 5% to 15%. Up and down we show a range of price-to-forward earnings multiples from 15x to 25x. The case for 10000 by the end of 2030 is one where investors pay 22x earnings on 10% per year earnings growth between now and then. Look at the range of multiples and earnings estimates below, with the cells in black showing the outcomes that support the S & P500 around 10000 by 2030. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer. The analyst, Adam Parker, responsible for the preparation of this research report certifies that: all the views expressed in this research report accurately reflect the research analyst’s personal views
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