RBC Capital Markets’ US strategist sees big stock gains in 2026

RBC Capital Markets sees the S&P 500 rising to 7,750 in 2026, implying a gain of another 14% or so from Friday’s close, as the bull market continues its shift toward relying more on financial results, and less on vibes, to keep trotting forward.

“It looks to us like it’s going to be another solid year in the market driven by solid earnings growth,” said Lori Calvasina, head of US equity strategy for RBC Capital Markets in New York.

Calvasina, who has worked on Wall Street since the tail end of the dot-com boom 25 years ago, added that she’s “not really looking for multiple expansion” — Wall Street’s term of art for rallies driven by rising valuations, usually expressed as higher price-to-earnings multiples, rather than increased expectations for earnings themselves.

When multiples expand, it reflects growing investor optimism and aggressiveness. They’re more willing to bet on companies that haven’t yet shown their business plans can actually produce profits.

And since the arrival of ChatGPT in November of 2022 — which set off the AI boom — multiple expansion has been the senior partner in the rise of the market, at least through the end of last year, accounting for about 56% percent of the S&P 500’s gain in that period. (To be clear, this wasn’t just about AI, as late 2022 was also the moment when postpandemic inflation began to lose steam, marking the beginning of the end of the Fed’s rate-hiking cycle.)

At any rate, Calvasina’s position sounds sensible in light of obvious shifts in investor sentiment. Price moves in response to major AI-related announcements suggest views are now more skeptical toward the massive data center spending binges giant tech companies are planning.

Case in point: Oracle soared more than 20% to a record high when it announced major deals with OpenAI back in September. But it’s since shed all of those gains and then some.

If investors are less willing buy on the latest announcement of plans for AI domination, that means a key question for markets — one that Calvasina said she was peppered with by institutional investors in Europe on a recent trip to visit clients — is: “Where are those earnings going to come from?”

Calvasina says the consensus is for earnings growth to pick up for the so-called S&P 493 — that mass of companies outside the septet of tech giants that dominate the markets and the AI trade. Analysts see the annual rate of profit growth for the S&P 493 rising from about 8% in 2025 to about 13% next year.

At the same time, those seven — Meta, Apple, Amazon, Alphabet, Tesla, Microsoft, and Nvidia — are still expected to keep growing their already massive profits even faster than the rest of the market. Analysts expect annual earnings growth of about 18%, down from around 26% this year.

“That gap, the dominance of Mag 7, is expected to continue narrowing,” Calvasina said.

That expected convergence in earnings growth has prompted a wave of Wall Street chatter about whether now is the time for investors to lighten up on massive tech leaders in order to bulk up on the rest of the market. After all, non-Magnificent 7 stocks could be poised to grow earnings more quickly, potentially generating faster gains in stock prices.

But Calvasina isn’t so sure. She sees the logic of the rotation trade, but has been slightly underwhelmed by the actual earnings growth the S&P 493 has been able to generate in 2025, which has contributed to lackluster gains compared to the Mag 7.

“It’s not that we’re totally bucking the consensus on that, but we just think we’re in the middle of kind of this messy, sloppy transition,” she said. “Leadership shifts could continue to be choppy for a while.”