With the S&P 500 surging as high as 6,700 before taking a bit of a breather to end the month, many investors have their sights set on the 7,000 milestone by year’s end. And while it seems extraordinary, it only entails a gain of about 5.5% in a single quarter.
Undoubtedly, the S&P 500 gained well over 6% since the start of August, making the run to 7,000 not only realistic, but maybe even likely, as the stock market moves past a historically bad month with some of the strongest monthly gains since May. Indeed, if there is a Santa Claus rally in store for this year, don’t be too shocked if the S&P 500 continues marching higher despite the growing number of skeptics and pundit warnings that stocks are either bubbly or overpriced.
Though I do see stocks as poised to run into a few road bumps in late-September, some big-name strategists think a run to 7,000 by year’s end is in the cards. Most notably, Deutsche Bank’s chief global strategist thinks the powerful AI tailwind and lower interest rates will help get markets there. Famed Fundstrat bull Tom Lee thinks a run to 7,000 is also possible, while JPMorgan, while still upbeat, doesn’t see 7,000 hit until the early part of 2026. If market momentum continues or accelerates from here, here are two stocks I expect will emerge as part of the new leadership group:
Apple
Perhaps investors were wrong to dismiss the iPhone 17 line, after all. With Apple (NASDAQ:AAPL | AAPL Price Prediction) stock gaining traction as its new devices went on sale, questions linger as to whether the latest and greatest Apple device has the potential to kick off a real supercycle. Today, the stock finds itself just north of $150 per share after dipping slightly in recent sessions.
With a brand-new, efficient design and some even more impressive hardware underneath the hood of the iPhone 17 Pro Max, with the A19 Pro chip, and an incredible new camera. Add the iPhone Air, new AirPods (with live translation), and the new Apple Watch 11, which has high blood pressure alerts, into the equation, and it’s clear that there’s enough to get people heading back to the Apple Store again after what was a quiet past year for new innovations, at least relatively speaking.
Although Apple may still be relatively quiet about its AI plans, one can’t help but think that Apple is on the right track, given its latest wave of AI features, such as hypertension notifications and live translation. With a foldable iPhone and a smarter Siri likely coming in the new year, perhaps it’s time to be more bullish on the laggiest member of the Magnificent Seven as it eyes new highs.
Nvidia
Nvidia (NASDAQ:NVDA) is another Magnificent Seven member that will need to get going if the S&P 500 is going to make a run for 7,000 by year’s end. Not only is it the largest and most influential stock of the 500, but it arguably has the strongest tailwinds at its back.
Over the past five years, shares have surged by over 1,200%. And as the firm sets its sights beyond AI to robotics and quantum computing, perhaps the best days for the AI chip kingpin aren’t yet over. Indeed, it’s tough to tell where NVDA stock goes from here, with shares cooling off since early August.
At just north of 50 times trailing price-to-earnings (P/E), NVDA faces great downside risks if the AI trade goes up in smoke. In any case, I think AI will need to be in the driver’s seat if the S&P is to get to 7,000 in a few short months. As hype builds for Rubin chips, perhaps a $5 trillion market cap isn’t so far away.
With Jensen Huang recently selling more shares, though, I wouldn’t look to back up the truck at north of $176 per share. It’s a performer that can keep doing well, but don’t expect another multibagger ascent. Nvidia is already a $4.3 trillion behemoth, and with that, it gets harder to keep doubling up many times over in just a few years.
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