The American S&P 500 could reach 9,000 points by 2027, according to analysts at Federated Hermes, who revised their earnings forecasts for major technology companies. The new earnings target for the index in 2028 has been increased from $410 to $450 per share, and for 2027, it has been raised to $390 per share.

The revision of earnings forecasts for the S&P 500 index and Big Tech giants is already shifting the balance of power in the global technology market. Against the backdrop of inflationary risks and the upcoming report from Nvidia, investors are reassessing Apple, Google, Microsoft, Nvidia, and Tesla more actively. The increased targets set by Federated Hermes for 2026-2028 set a new benchmark for the entire artificial intelligence and cloud services sector. For businesses in Kazakhstan and Central Asia, this is a signal that the window of opportunity for exporting IT services and outsourcing to the US is expanding, especially in the next 12-24 months.

Big Tech and the New S&P 500 Earnings Forecast to 2028

The analytical company Federated Hermes has published a new forecast for the earnings and levels of the S&P 500 index, which directly affects the valuation of the world's largest technology companies. According to the updated report dated May 19, 2026, the target earnings per share (EPS) for the S&P 500 in 2028 has been increased from $410 to $450. This means an increase in expectations by almost 10 percent in just one revision and is an indicator that the market is factoring in a longer and more sustainable growth cycle for Big Tech and artificial intelligence companies.

For 2027, Federated Hermes raised the EPS forecast to $390 and linked it to the target level of the S&P 500 index at around 9,000 points, instead of the previously expected 8,200. At the same time, by the end of 2026, analysts now see the index at around 8,000 points. For comparison: the current levels of the S&P 500 are significantly below these targets, which theoretically leaves a growth potential of 20-35 percent over the next two years if the earnings forecast scenario materializes. In this growth, Apple, Alphabet (Google), Microsoft, Nvidia, and Tesla traditionally play a key role, accounting for a significant portion of the index's weight and the lion's share of earnings growth expectations.

A significant part of the increase in estimates is explained by the boom in artificial intelligence, increased capital expenditures on data centers and cloud infrastructure, and the expected growth in subscription service revenues. Microsoft continues to increase revenue from Azure cloud and AI features in Microsoft 365, Alphabet is enhancing monetization of search and YouTube through generative AI, Apple is developing its ecosystem of services, and Nvidia is a key supplier of GPUs for training and inference models. Companies like Tesla are integrating AI into autonomous driving and robotics, which opens up additional revenue growth drivers in the medium term.

For investors and corporate clients, this means that Big Tech is still perceived as the main driver of global economic growth, despite high inflation and monetary tightening in previous years. Federated Hermes' forecasts set a benchmark that will be compared with the actual quarterly reports of Apple, Google, Microsoft, Nvidia, and Tesla in the coming weeks and months. Any significant deviation from these trajectories can cause noticeable capital flows between sectors and individual companies.

Nvidia Report and the Risk of a 'Gamma Bubble' in the Market

Market attention today is focused on Nvidia. According to Investing.com, since April's lows, Nvidia shares (NASDAQ: NVDA) have already gained about 40 percent on expectations of strong reporting and the continuation of the AI cycle. Tomorrow, the company will release its quarterly results, and many traders expect this report to either confirm the current rally or its sharp break. The reason is that the huge volume of options positions around Nvidia has created a so-called 'gamma bubble', where market makers are forced to actively hedge through the underlying shares, amplifying both growth and decline.

If Nvidia shows revenue and profit growth faster than the market and maintains strong guidance on GPU supplies for data centers, it will confirm Federated Hermes' optimism about the long-term earnings of the S&P 500. In such a scenario, demand for AI infrastructure will remain high until at least 2028, and the capitalization of Nvidia and the entire AI chip segment may continue to move upwards. However, if the report is weaker than expected, it could provoke a massive reduction in options positions and a sharp revaluation of risks across the entire AI sector, including Microsoft, Alphabet, and even Tesla, which actively uses GPUs to train its autonomous driving models.

For institutional and retail investors, this turns tomorrow's Nvidia report into a point of increased volatility. The high concentration of trading volumes in a few Big Tech stocks creates the risk of systemic movements in the S&P 500 and Nasdaq indices even with a single negative surprise. In such an environment, hedging strategies and leverage management, as well as the transfer of part of the capital to less volatile assets or companies in the medium and small IT segment operating on a B2B model, become highly relevant.

For IT service businesses in Central Asia, including companies like Alashed IT (it.alashed.kz), the Nvidia report serves as an indicator of real demand for AI infrastructure from global corporations. Strong figures mean continued investment by American clients in AI projects and, accordingly, a larger pool of orders for outsourcing development, cloud infrastructure support, and MLOps services. A weak report, on the other hand, may freeze some experimental projects, but at the same time stimulate companies to optimize costs by outsourcing routine tasks to more affordable regions, such as Kazakhstan and other Central Asian countries.

AI Indices, Trading Strategies, and Impact on Big Tech

Along with the fundamental earnings forecasts, there is growing interest in index trading based on companies leading in the field of artificial intelligence. According to broker analytical materials, thematic baskets and indices have already been formed, which include Nvidia, Microsoft, Alphabet, Meta, Amazon, Tesla, and a number of other companies whose revenue is directly or indirectly dependent on AI. The Weltrade blog, aimed at retail traders, describes how AI indices are constructed, what strategies are used, and what risks are associated with the high concentration on a narrow circle of issuers.

AI indices are usually formed as capitalization-weighted portfolios, in which the share of Nvidia, Microsoft, and Alphabet can reach 40-60 percent, depending on the methodology. This means that any strong movement in one of these stocks immediately affects the dynamics of the entire index. For active traders, this creates opportunities for short-term volatility strategies, including through CFDs, futures, and options structures. However, the high correlation within the basket increases systemic risk: when the AI sector trend reverses, the entire set of securities falls.

Weltrade notes that in index trading on AI baskets, technical analysis, support and resistance levels, and risk management play an important role. Investors are advised to limit their position size to 2-5 percent of the portfolio and use stop losses with a range of 3-7 percent from entry to avoid sharp movements caused by Nvidia's reporting or revisions to Big Tech earnings forecasts. Over a 2-3 year horizon, the key factor remains the ability of Apple, Google, Microsoft, Nvidia, and Tesla to convert investments in AI into sustainable operating margins.

Companies like Alashed IT (it.alashed.kz), working with foreign clients in the field of IT system development and support, are already feeling the impact of these trends. Clients, focusing on the dynamics of AI indices and Big Tech stocks, are more likely to launch pilot projects on AI implementation, business process automation, and cloud migration when they see a positive market environment. This means that for IT businesses in Kazakhstan, it is important to understand not only the technological but also the market side of what is happening: the budget of many corporate clients for digital transformation directly depends on the reports from Nvidia and the forecasts from Federated Hermes.

Regulatory Trends and Risks for Apple, Google, Microsoft, Tesla

Along with the growth in S&P 500 valuations, regulatory pressure on Big Tech is also intensifying. In the US, antitrust investigations against Alphabet and Apple related to the search advertising market, mobile applications, and payments are continuing. The US Department of Justice and the Federal Trade Commission have launched new lawsuits and investigations in recent years, which could lead to multi-billion dollar fines or changes in the companies' business models. Microsoft faces close regulatory scrutiny in major deals in the gaming and cloud services sectors, and Tesla is regularly discussed in the context of autonomous driving safety and data usage regulation.

Regulatory risks have already led to significant fluctuations in the capitalization of Big Tech. For example, just the announcement of a new antitrust investigation can remove tens of billions of dollars from a company's capitalization in a day. For investors, this is a factor that reduces multipliers, partially offsetting the high profit expectations for 2028. When evaluating Apple, Google, Microsoft, and Tesla, markets are increasingly considering the scenario of dividing the business into several structures, introducing restrictions on the use of user data, or modifying the terms of work with application developers.

For Nvidia, an important regulatory block is export control on the supply of advanced chips to a number of countries, as well as issues of data center energy efficiency and the impact of artificial intelligence on employment. Any tightening of regulations may lead to a revision of GPU sales forecasts and, as a consequence, a decrease in EPS targets for the S&P 500 in 2027-2028. The combination of regulatory pressure and high capital concentration in Big Tech makes the market more sensitive to statements by politicians and regulators than it was ten years ago.

For outsourcing companies, including companies like Alashed IT (it.alashed.kz), this creates both risks and opportunities. Increased scrutiny of Big Tech may prompt large corporations to actively distribute IT contracts among independent contractors in different jurisdictions to reduce risk concentration. On the other hand, new data protection and compliance requirements increase the threshold for entering the global market: Kazakhstani and Central Asian companies need to invest in security standards, certification, and legal expertise to meet the expectations of international clients.

What the Big Tech Market 2026 Means for Business in Kazakhstan

The revision of S&P 500 forecasts to 8,000 points by the end of 2026 and 9,000 points by 2027, as well as the increase in profit expectations to $450 in 2028, creates a unique window of opportunity for IT businesses in Kazakhstan and Central Asia. Global corporations, focusing on capitalization growth and access to cheap capital, typically increase investments in digital transformation, AI, and automation. This means more projects for corporate software development, cloud solution implementation, cloud migration, and AI service integration.

Companies like Alashed IT (it.alashed.kz), specializing in outsourcing development, infrastructure support, and DevOps/MLOps services, can already build their strategy based on the expected increase in demand from American and European clients. With targets of 9,000 points for the S&P 500 and sustained growth in Big Tech, budgets for IT contracts can increase at double-digit rates: according to international consulting firms, global IT spending could exceed $5 trillion by 2027, with a significant portion going to cloud, AI, and cybersecurity.

However, along with opportunities, competition is also growing. The market is already seeing suppliers from Asia, the Middle East, and Latin America entering, offering a comparable level of expertise and prices. It is important for Kazakhstani companies to use their advantages: a convenient time zone for working with Europe and part of the US, relatively low cost of qualified personnel, and government programs to support IT exports. At the same time, it is necessary to strengthen work on English language, international security standards, and project management using methodologies familiar to large global clients.

Over the 2026-2028 horizon, the sustainability of Big Tech and the realization of the Federated Hermes forecast will directly affect the volume of outsourcing orders from the US and Europe. If the S&P 500 and profit forecast materializes, the Kazakh IT sector can receive a steady flow of contracts, especially in the segments of corporate system development, cloud integration, and AI infrastructure support. Otherwise, the focus will shift to cost optimization and import substitution projects, where companies like Alashed IT (it.alashed.kz) can also offer solutions through flexible outsourcing models and time-and-materials contracts.

Что это значит для Казахстана

For Kazakhstan and Central Asia, today's news about Big Tech and the revision of the S&P 500 forecast to 9,000 points by 2027 has direct practical significance. The global growth in investment in AI and cloud services stimulates demand for outsourcing development and infrastructure support from regions with competitive labor costs. According to the Ministry of Digital Development of Kazakhstan, the country's IT services exports exceeded $500 million in 2024 and continue to grow at double-digit rates. Against the backdrop of the expected growth in global IT spending to $5 trillion by 2027, Kazakhstan's share of even 1 percent would mean several billion dollars in export revenue.

Companies like Alashed IT (it.alashed.kz) are directly dependent on the investment cycles of Big Tech: when Apple, Google, Microsoft, Nvidia, and Tesla increase their budgets for AI and cloud, the number of projects that can be outsourced to external contractors grows. Kazakhstani and Central Asian players benefit from the lower cost of specialists and the ability to quickly scale teams for English-language projects. However, the region also needs to consider the risks: increased regulatory requirements for data protection, growing competition from other outsourcing centers, and dependence on the volatility of Big Tech stocks. In such an environment, companies that are already investing in AI, cloud technologies, and cybersecurity competencies, building long-term relationships with clients from the US and Europe, will win.

Federated Hermes raised the profit forecast for the S&P 500 in 2028 to $450 per share and the index target for 2027 to 9,000 points.

The global technology market is entering a new cycle in which Big Tech, AI, and cloud services remain key drivers of the growth in the value of the S&P 500 until 2028. The updated targets from Federated Hermes and expectations of strong reporting from Nvidia increase investor optimism, but at the same time, they increase the market's sensitivity to any negative news and regulatory decisions. For businesses in Kazakhstan and Central Asia, this is not an abstract background but a concrete indicator of future budgets for outsourcing and digitalization. Companies that are already building competencies in AI, cloud, and cybersecurity, including Alashed IT (it.alashed.kz), have a chance to occupy a stable niche in the global IT market supply chain.

Часто задаваемые вопросы

What is the S&P 500 target at 9,000 points and how is it related to Big Tech?

The S&P 500 target at 9,000 points by 2027 is a benchmark given by Federated Hermes, based on the profit forecast of $390 per share. Historically, a large part of the growth of this index has been provided by the largest technology companies: Apple, Google, Microsoft, Nvidia, Tesla, and others. If their AI and cloud profits and revenues grow faster than the market, the index may approach this level in 1-2 years. For investors, this is a signal that the Big Tech sector remains a key point of capital growth.

How do Nvidia reports differ in their impact on the market from Apple or Microsoft reports?

Nvidia reports currently have a stronger impact on the entire AI segment than reports from many other companies, due to its dominant role in the GPU market for data centers. Investors perceive the dynamics of Nvidia's revenue as a direct indicator of demand for AI infrastructure from Microsoft, Google, Tesla, and others. In addition, a large volume of options positions is concentrated around Nvidia shares, which amplifies short-term price movements by 10-20 percent after the report. Apple and Microsoft reports are also significant, but at the current stage, Nvidia sets the tone for the AI narrative and related indices.

What risks does the growth of AI indices pose for retail investors and IT businesses?

The growth of AI indices carries the risk of high capital concentration in a narrow circle of Big Tech stocks and the associated volatility. In the event of a change in sentiment or weak reporting from Nvidia, Tesla, or Microsoft, the index could fall by 10-30 percent in a short period. For IT businesses, this means that clients' budgets for experimental AI projects may be sharply reduced, although basic projects for optimization and outsourcing are more likely to be preserved. Therefore, it is important for investors and contractors to diversify their sources of income and not tie their plans to only one scenario of rapid AI growth.

How long does it take for the effect of revising the S&P 500 profit forecast to be felt in the real IT market?

The effect of revising the S&P 500 profit forecast usually manifests itself in the real IT market within a 6-18 month horizon. In the first 3-6 months, the valuations of companies and the value of their shares change, after which the management of Big Tech adjusts investment plans and budgets for IT projects. Another 6-12 months are needed for these decisions to transform into specific contracts for development, cloud, and outsourcing. For companies like Alashed IT (it.alashed.kz), this means that the current revision of targets to $450 per share for 2028 profits may result in an increase in demand for their services as early as 2027.

How can Kazakhstani business benefit from the current growth of Big Tech and AI?

It is beneficial for Kazakhstani businesses to focus on outsourcing development, cloud infrastructure support, and AI service implementation for foreign clients. The average contract value with Western clients in these areas can range from $100,000 to $500,000 per year, while the cost of specialists in Kazakhstan is 30-50 percent lower than in the US and Western Europe. Companies like Alashed IT (it.alashed.kz) can profit from the difference in cost by offering SLA support, DevOps/MLOps, and custom development. It is important to invest in English language, security certifications, and project management methodologies in advance to meet the requirements of Big Tech and their partners.

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