TradingKey - As the S&P 500 continues to hit new all-time highs despite macroeconomic headwinds, many strategists have raised concerns about valuation risks, drawing comparisons to the 2000 dot-com bubble. However, Wells Fargo argues that today’s market is fundamentally different — and that the S&P 500 could still rise double digits to 7,000 by year-end, driven by tech giants with strong underlying fundamentals.

In a recent report, Chris Harvey, Wells Fargo’s Chief U.S. Equity Strategist, reiterated his year-end target of 7,000 for the S&P 500 — one of the most bullish forecasts on Wall Street — implying an 11% gain from Friday’s (July 18) close at 6,296.79.

Harvey noted that since the April market low, large-cap tech stocks have been central to the 27% rebound in the S&P 500 — with the "Magnificent Seven" surging 42% over the same period.

On Monday, July 21, in an interview, Harvey said, “What we’re seeing is the winners continue to win.”

He added, “The uber-cap companies have the higher margins, are gaining more market share. There is a real secular trend in AI that will continue.”

Addressing widespread concerns about high valuations, Harvey emphasized that today’s S&P 500 is fundamentally stronger than it was 25 years ago.

He thought that the leaders of the index today are more growth-oriented, far more technology-focused, more productive, and led by more skilled management teams.

Earlier this month, both Morgan Stanley and Bank of America warned of potential “summer bubble” risks after the sharp rally.

Morgan Stanley cautioned that as the impact of Trump’s trade policies begins to show up on corporate balance sheets, U.S. equities could face a 5–10% pullback in Q3 — a quarter it sees as particularly risky.

However, Morgan Stanley added that any correction would likely be short-lived, and advised investors to buy the dip.

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