Stifel raises S&P 500 target to 7800 points, suggests allocating to cyclical value stocks

Stifel has raised the year-end target for the S&P 500 to 7800 points, believing that the US economy is in an overheated state where growth and inflation are heating up simultaneously. Stifel expects Amazon, Microsoft, Meta, and Google to have a combined capital expenditure of $725 billion in 2026, which is $100 billion higher than expected. Stifel suggests reducing reliance on the consumer sector and instead allocating to cyclical value stocks such as banking, transportation, materials, energy, semiconductors, software, and equipment.