2026 Wall Street Top 10 Predictions: S&P 500 Plummets, Gold Prices Break $10,000, AI Unemployment Wave Hits

Wall Street’s forecasts for 2026 are highly polarized: Goldman Sachs predicts the S&P 500 will reach 7,600 points, while the bearish camp warns of a 20% crash. Economist Jim Rickards calls for gold prices to hit $10,000, AI pioneer Geoffrey Hinton warns of unemployment waves, quantum computing could wipe out Bitcoin, and Musk’s SpaceX valuation is approaching $800 billion with an IPO countdown.

US Stock Bull-Bear Battle: Goldman Sachs forecasts S&P up to 7,600 points, short sellers warn of a crash

Morgan Stanley predicts the S&P 500 will rise to 7,800 points in the next 12 months, about 14% higher than the current 6,858. Goldman Sachs sets a target of 7,600 points, JPMorgan Chase at 7,500, and if the Federal Reserve’s easing exceeds expectations, it could break through 8,000. US Bank is the most conservative, expecting only a 4-5% increase to 7,100.

However, bearish analyst Sean Williams from Motley Fool stated on January 1 that US stocks will decline at least 20% this year. The core reason is that the Shiller P/E ratio of the S&P 500 has reached the second-highest level in history, only below the dot-com bubble burst. Since 1871, this P/E ratio has only exceeded 30 six times, with the previous five declines each at least 20%.

Notably, in 2025, US stocks underperformed the international markets. The MSCI Global Index, excluding US companies, rose about 29% for the year, significantly outpacing the 16% gain of the S&P 500 — the largest gap since 2009. This divergence suggests US stock valuations may already be overinflated.

AI Bubble Burst or the Beginning of a New Industrial Revolution

Renowned economist and Rockefeller International Chairman Ruchir Sharma pointed out at the end of December that the AI bubble might burst sometime in 2026. He said, “All bubbles burst for the same reason: higher interest rates. Once US inflation rebounds and forces the Fed to tighten, the current overinvestment bubble driven by AI capital expenditure will come to an end.”

Lazard Asset Management warned that AI-related capital spending increasingly relies on debt financing, and related assets could become obsolete quickly, risking overcapacity and delayed returns. If tech companies’ profits fall short of expectations, markets could experience a sharp correction.

Optimists believe AI has ushered in a new industrial era. Google Brain co-founder Andrew Ng cited Harvard economist Jason Furman data on December 26, stating that in the first half of 2025, data center and AI investments contributed entirely to US GDP growth. Infrastructure booms created real jobs and sales, marking the start of the “new industrial era.”

Wedbush identifies 5 major AI winners in 2026

Microsoft (AI growth turning point)

· Other companies are actively deploying Microsoft applications

· Cloud AI service revenue will explode

· Market share of enterprise AI solutions will expand

Apple (24 billion device advantage)

· Possesses 1.5 billion iPhones worldwide, the largest consumer base

· AI commercialization could contribute $75-100 per share in the coming years

· Cook will remain CEO until the end of 2027 to push AI transformation

Tesla (valuation shifting towards AI)

· FSD adoption and CyberCab autonomous vehicle development

· Market cap expected to reach $2 trillion within a year

· Optimistically, by the end of 2026, it could hit $3 trillion

Palantir (candidate for trillion-dollar valuation)

· Booming demand for AI solutions in business and government sectors

· Expected to grow into a trillion-dollar company

CrowdStrike (beneficiary of cybersecurity AI)

· Cybersecurity is a core beneficiary sector of the AI revolution

· Product suite continuously expanding into enterprise markets

· Growth potential underestimated by the market

Quantum computing to wipe out Bitcoin and three major super IPOs

Jamie Garcia, Director of Strategic Growth and Quantum Collaboration at IBM, said 2026 will be a milestone year for quantum computing, with quantum computers surpassing traditional computers for specific tasks, achieving “quantum supremacy.” However, Neil Wilson, strategist at Sanford C. Bernstein, warned on December 2, that when the “quantum day” arrives, a fully operational quantum computer will break current digital security standards, making emails, bank transfers, and crypto wallets insecure, potentially crashing Bitcoin prices close to zero.

Motley Fool analyst countered that the quantum computing bubble is already in danger, with four listed quantum companies having price-to-sales ratios of IonQ (146x), Rigetti Computing (981x), indicating a high valuation bubble risk.

In IPO news, SpaceX is valued at $800 billion, OpenAI at $500 billion, and Anthropic at $30 billion, all planning to go public in 2026. PwC noted that IPOs in 2025 were delayed due to government shutdowns, creating a backlog of over 800 unicorns, which may be released in the first half of 2026.

Federal Reserve personnel uncertainty and Rogers’ warning of an economic crisis

Jerome Powell will step down as Fed Chair in May 2026, but his term as a board member still has two years remaining, making his potential reappointment a key market concern. Nomura strategist Naka Matsuzawa pointed out on December 29 that the policy direction of the new Fed Chair is uncertain, and the market may see a “flight from dollar assets” between July and November, leading to lower US Treasury yields, a stock correction, and a weaker dollar.

Jim Rogers predicted on December 23 that a major economic crisis could occur in 2026. He said, “Next year, the US and the world will face major problems. The US will fall into an unprecedented low. Japan also faces debt issues. The whole world will suffer.” Standard Chartered listed four risks: underperformance of AI sector, credit default events, Fed rate hike restrictions, and the Bank of Japan’s unexpected hawkish stance pushing the yen sharply higher.

AI pioneer Geoffrey Hinton warned on December 28 that AI will have the “ability to replace many jobs” in 2026, capable of replacing call centers and more jobs. He added, “In a few years, AI will be able to complete months-long software engineering projects, and by then, almost no humans will be needed.” Deloitte’s chief economist Diane Swonk pointed out that in the AI era, companies will need to do more with fewer employees.