Here are analysts’ S&P 500 forecasts for 2025

The S&P 500 index has delivered strong returns this year. And analysts at major Wall Street firms expect 2025 to be another good year.

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The S&P 500 is in the middle of a roaring bull market right now. Over the last five years, the index has risen about 90%, helping long-term investors such as me build wealth.

Wondering what lies in store for the index in 2025? Here’s a look at some of the latest forecasts from Wall Street analysts.

Further gains on the horizon?

In the table below, I’ve put the 2025 S&P 500 forecasts from seven major financial institutions. Note that these are year-end targets:

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Firm2025 target
Morgan Stanley6,500
Goldman Sachs6,500
UBS6,500
BMO Capital Markets6,700
Deutsche Bank7,000
JP Morgan 6,500
BofA6,666

Looking at the figures in the table, Deutsche Bank has the highest forecast at 7,000. The average of the seven firms however, is 6,624.

Given that the S&P 500’s trading at 6,047 today, it’s clear that the consensus view is that the bull market will continue. Looking ahead, it seems firms expect the index to rise another 10% or so over the next year and a bit.

I’m bullish

I think that’s reasonable. For a start, economic conditions in the US are likely to be healthy next year (Donald Trump’s economy-friendly).

Secondly, we’re in the midst of a powerful tech revolution, which is helping a lot of companies generate top and bottom-line growth. Additionally, there’s room for the market rally to broaden out.

Of course, there are no guarantees the bull market will continue. In the short term, the stock market’s very unpredictable. If we were to see an unexpected ‘black swan’ event, the index could fall.

How to gain exposure

But let’s say the US market does rise next year. What are the best ways to get exposure to it? Well, one option to consider is a S&P 500 index fund such as the Vanguard S&P 500 UCITS ETF (LSE: VUSA).

This product”s designed to track the index. So if the S&P 500 rises, it should rise too.

It’s worth noting that with this ETF, exchange rates can affect returns for UK investors due to the fact that it tracks a US index. For example, if the S&P 500 was to rise 10% in 2025 but the pound gained 3% against the US dollar, returns for UK investors would only be around 7% (ignoring trading and platform fees).

Overall though, there’s a lot to like about this product, in my view. Not only does it provide exposure to all the fantastic stocks in the S&P 500 (eg Apple, Microsoft, Nvidia, etc) but annual fees are very low at 0.07%.

Created with Highcharts 11.4.3Vanguard Funds Public - Vanguard S&P 500 Ucits ETF PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Of course, another option to consider is investing in individual S&P 500 stocks. This approach is riskier, but there’s potential for larger gains.

I have no doubt that there will be plenty of stocks that outperform the S&P 500 by a wide margin next year and deliver gains of 20%, 30%, 50%, or more. Some US stocks I’m bullish on include Amazon, CrowdStrike, and Uber (if you’re looking for more US stock ideas you can find plenty here at The Motley Fool).

I’ll point out that there’s nothing to stop investing in a tracker fund and buying a few individual stocks in the hope of generating higher returns. This is what I do, and the strategy has worked well for me in recent years.

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Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has positions in Amazon, Apple, CrowdStrike, Microsoft, Nvidia, and Uber Technologies. The Motley Fool UK has recommended Amazon, Apple, CrowdStrike, Microsoft, Nvidia, and Uber Technologies. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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