S&P 500 at 6,500 by end of 2025, Goldman strategist predicts

by Carmen Reinicke

The S&P 500 Index will rise through the end of next year amid continued US economic expansion and earnings growth, according to Goldman Sachs Group Inc.’s chief equity strategist David Kostin. 

Kostin boosted his S&P 500 target to 6,500 for year-end 2025, about 10% above current levels. He previously had set a 12-month S&P 500 target at 6,300. The new prediction matches that of Morgan Stanley’s Mike Wilson, who recently boosted his own forecast for US equities. 

“In our baseline macro outlook, the economy and earnings continue to grow and bond yields remain around current levels,” Kostin wrote in a note Monday. 

The S&P 500 has risen 24% year-to-date as the artificial-intelligence boom sent stocks like Nvidia Corp. soaring and the US economy has continued to show strength. The gauge is still near a record hit Nov. 11 in the wake of Donald Trump’s presidential election victory.

The median estimate from strategists for the end of 2025, as of mid-October, was 6,000. Kostin’s call for a gain of about 10% is in line with a typical call from Wall Street in the last few years.

Event risk for US stocks is high both to the upside and the downside, Kostin said. “Friendlier” fiscal policy or a more dovish Federal Reserve could further lift stocks, though Trump’s proposed tariffs and higher bond yields may pressure equities, he said. 

So far, Goldman sees the effect of Trump’s tariffs and a possible 15% corporate tax rate on domestic manufacturers roughly offsetting one another, at least in their own EPS forecasts. 

“We believe investors should take advantage of periods of low volatility to capture equity upside or hedge downside through options,” Kostin wrote. 

Other predictions from Goldman:

• The “Magnificent 7” tech stocks will continue to outperform the rest of the S&P 500 next year, but by “the slimmest margin in seven years”
• Stocks with potential for merger-and-acquisition activity may be desirable; a basket of such stocks outperformed during Trump’s first term in office

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