In our exclusive poll, investment pros expect profit growth, lower interest rates, and AI to drive the market higher. And a lot of them like gold. By Paul R. La Monica

There's nothing like a roaring stock market to turn investment bears into bulls. Just ask respondents to Barron's latest Big Money poll of professional investors, 47% of whom now say they are upbeat about the market's prospects over the next 12 months. That compares with just 28% who called themselves bullish in the spring, the lowest reading since at least 1997.

Consider all that has happened in the past six months to erase the bearish sentiment that suffused our spring survey -- and Wall Street. The S&P 500 has rallied nearly 40% from its April low as fears of a crippling trade war have faded. Renewed enthusiasm for artificial-intelligence-related stocks has also helped propel the index to successive highs. And expectations for more interest-rate cuts and fiscal stimulus continue to lift investors' spirits.

Our latest poll finds only 19% of money managers are bearish about the outlook for stocks, compared with 32% in April, a near-30-year high. Another 34% say they are neutral, down from 42% in the spring.

This isn't a time to rest easy, however, as the market's rebound has led to new concerns. Interest in AI has levitated shares of Nvidia, Broadcom, and their ilk, but also stoked fresh fears of an AI bubble. Comparisons to the late-1990s dot-com bubble abound, as do invocations of the crash that followed.

"AI will be transformative, but stocks have run up so much," says James Bitzer, chief investment officer at Falcon Point Capital in San Francisco. "The risk is that valuations will compress."

Barron's conducts the Big Money poll of professional investors twice a year, in the spring and fall, with the help of Erdos Media Research in Ramsey, N.J. The latest poll, emailed to money managers in late September, received 122 responses. The poll surveys portfolio managers and investment strategists at a wide range of firms throughout the country, from some of Wall Street's biggest investment firms to smaller, independent wealth advisors.

Despite the increase in the percentage of bulls, 57% of Big Money managers say they think stocks are overvalued, compared with just 3% who call the market undervalued.

The optimists predict strong returns for stocks through the end of next year. Based on their median forecasts, the Dow Industrials, S&P 500, and Nasdaq Composite all will end 2026 with gains of 9% to 10.5% from current levels. Profit growth should drive these gains: Nearly 38% of the Big Money participants say they expect earnings per share for the S&P 500 to rise between 6% and 10% from this year's levels, while another 13% forecast earnings-per-share growth of more than 10%.

John Stoltzfus, chief investment strategist at Oppenheimer Asset Management in New York, expects the rally to broaden as AI starts to benefit more sectors. "We can't help but think that AI is already creating efficiencies in the economy," he says.

Eric Clark, chief investment officer at Accuvest Global Advisors in Walnut Creek, Calif., agrees. "The story of 2026 is going to be who Nvidia, Broadcom, and Oracle are building AI for," he says. "When AI is broadly deployed, that will turn into earnings beats for other companies that aren't reflected in certain stocks. There will be huge productivity gains. You've heard about that already from big banks."

Harris Nydick, a founding partner and managing member at CFS Investment Advisory Services in Totowa, N.J., is also bullish. "It has often been the case that a small group of stocks dominate," he says. "But the rest of the market, the other 490 in the S&P 500, are attractive and have a lot going for them. Earnings are strong. Dividends are strong. The consumer is fairly resilient."

Indeed, a variety of stocks outside of tech, including General Motors and 3M, rallied during the week after topping Wall Street's third-quarter earnings forecasts and issuing promising fourth-quarter guidance.

The bulls seem eager to chase the rally as stocks climb. More than two-thirds of Big Money pros say their portfolios have a higher weighting in stocks now than six months ago.

Money managers have benefited this year not only from the U.S. market rally, but also from rallies in other developed markets such as Europe and Japan, and emerging markets such as China and Brazil. Nearly 60% of Big Money poll participants say they boosted their allocation to non-U.S. stocks over the past 12 months, while nearly 40% say they plan to increase their investments in non-U.S. stocks over the next 12 months.

With stocks continuing to climb, 62% say they have reduced their allocation to bonds and cash. They may be shunning the most conservative investments, but two-thirds of poll respondents say they are bullish on gold. The yellow metal has rallied about 57% year to date, to $4,055. It peaked Monday at $4,398 an ounce. "The price of gold is telling us something," says Walter Christopherson, chairman of Linscomb Wealth in Houston. "There is continued demand from central banks looking to build gold reserves instead of holding the dollar, and individuals looking for alternative investments."

The Big Money bears see trouble brewing in gold's advance and stocks' lofty valuations. They expect the major indexes to fall by 8% to 13.5% through the end of 2026 as the AI trade loses traction and economic concerns weigh on markets. Some 38% of poll respondents think stocks will suffer a bear market, defined as a 20% decline from recent highs, sometime in the next 12 months.

Chris Ryan, CEO of Ryan Investments in Aspen, Colo., says much of the rally since April has been fueled by FOMO, or fear of missing out. He is focused instead on what he calls JOMO, or the joy of missing out on a potential shakeout in tech stocks such as Palantir Technologies and other Nasdaq highfliers. "Don't get me wrong: AI will change the world, just as the internet did," he says. "But the early AI winners may not be the long-term winners."

Palantir is trading for nearly 205 times next year's earnings estimates. A quarter of Big Money respondents call it the market's most overvalued stock. "I can't wrap my head around the valuation," says Accuvest Global's Clark. "When momentum stocks break, they break aggressively and a lot of people [sell] at once. I respect the company, but the valuation reflects the best of times."

Twenty-one percent of managers say Tesla is the market's most richly valued stock, while 13% bestow the "honor" on Nvidia. Tesla sports a price/earnings multiple of almost 180 times next year's expected earnings, while Nvidia trades for 28 times 2026 estimates.

Nvidia, the leader in AI chips, also has plenty of fans. Five percent of managers call it their favorite stock. "Nvidia is a bellwether for AI," says Nydick. "It is uniquely positioned to keep growing."

Erica Snyder, CEO of Hunter Associates in Pittsburgh, likes tech stocks overall. While there is a good case for market leadership to broaden out, she says, it is encouraging to see companies with strong balance sheets leading in AI spending. AI use is moving from the hype phase to the implementation phase, she notes. If the technology lives up to expectations, corporate margins will widen, boosting earnings growth.

The Big Money managers say an economic slowdown, disappointing earnings, and political turmoil are the biggest near-term risks to the market's advance. Even so, 37% of poll respondents forecast growth of 2% to 3% next year in gross domestic product. Another 25% see GDP increasing just 1.5% next year.

Poll participants don't seem to be cheering many of the White House's economic initiatives. Nearly two-thirds of respondents say they disapprove of President Donald Trump's tariffs, and 58% grade the administration either a C or D for overall fiscal policy since Inauguration Day.

"I am a believer in free markets and that, in the long run, individuals as a group make better decisions than governments," says Linscomb's Christopherson. "Tariffs are a tax. [They] can be a drag on spending and growth. Tariffs have created market volatility and confusion."

Still, some managers give Trump credit for his willingness to negotiate with other countries on tariffs. "I don't like tariffs, but there has to be greater fairness in trade," says Oppenheimer's Stoltzfus. "This shock-and-awe policy can be awful for the markets, but the deals in the making with Japan, South Korea, the European Union, and Canada are all much friendlier."

Stoltzfus awards the Trump team a B for its economic initiatives.

So does Nydick, who says the administration is correct to take a harder stance on trade with China. "Both the U.S. and China are over their skis in their posturing about tariffs," he says. "But at some point, cooler heads will prevail. There are a lot of reasons the U.S. needs to make a deal with China, but the good news is that there are a lot of reasons for China to make a deal, as well."

Poll respondents have measured praise for the Federal Reserve and its handling of monetary policy. The Fed cut interest rates by a quarter of a percentage point in September, and is expected to cut twice more this year and several times in 2026. Fifty-seven percent of Big Money managers say the Fed's current policy stance is appropriate, compared with 34% who think policy is too tight.

In our spring survey, 70% thought policy was "just right," while 23% thought the Fed should loosen policy and cut rates.

The Fed will be an important story for the financial markets in 2026, as Jerome Powell's term as Fed Chair will end in May. Trump, who berated Powell earlier this year for not lowering interest rates, is expected to nominate a replacement later this year.

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October 24, 2025 21:31 ET (01:31 GMT)

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