Kabra believes that the current rise in U.S. stocks is very rational and refutes the "bubble warnings" proposed by some Wall Street analysts.

Manish Kabra, a strategist at Societe Generale, said that against the backdrop of improving corporate earnings prospects and the artificial intelligence boom, the upward momentum of the U.S. stock market is unstoppable.

Kabra's team has raised the year-end target for the S&P 500 Index (SPX) from 4,750 points to 5,500 points, which is the highest forecast among strategists tracked by foreign media.

The new target means that U.S. stocks will rise by more than 5% from the current level.

"American exceptionalism is becoming stronger and stronger," Kabra wrote in a report. "Although the market is generally optimistic, we believe that the current rise in U.S. stocks is rational, not excessive, because increased profit growth is driving the S&P 500 Index to continuously set new highs."

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Since last November, when a team including Kabra advised buying U.S. stocks, the S&P 500 Index has risen by 20%.

U.S. stocks have repeatedly hit new highs this year due to market bets that the Federal Reserve will cut interest rates, and the S&P 500 Index has set a record high 20 times since the beginning of 2024.

Resilient economic growth has supported corporate earnings, and tech giants have soared in the artificial intelligence boom.

Other strategists, including Savita Subramanian, head of U.S. equity strategy at Bank of America, and Jonathan Golub, managing director at UBS, have also raised their year-end targets for U.S. stocks in the past month, as market forecasters rush to catch up with the pace of the stock market rise.

The S&P 500 Index closed around 5,225 points on Wednesday, already exceeding the average target of 4,962 points calculated by foreign media strategists.However, this upward trend in the U.S. stock market has also triggered Wall Street analysts to issue "bubble warnings," such as Bank of America's Chief Investment Strategist Michael Hartnett and JPMorgan Chase's Chief Market Strategist Marko Kolanovic.

But Kabra from Societe Generale refuted these concerns, stating that the S&P 500 index needs to rise to around 6,250 points, which is a 20% increase from the current level, to reach the peak of bubble valuations.

However, he warned that after the explosive rise at the beginning of the year, the pace of the U.S. stock market's rise will slow down, as the current valuation has already reflected the expectations of the Federal Reserve's interest rate cuts.

He predicted that the U.S. stock market will not fall before the Federal Reserve raises interest rates again or corporate earnings weaken.