The S&P 500 bull market entered its third 12 months a few months in the past — and on the similar time, the benchmark is racking up vital annual features too. The index climbed greater than 20% in every of the 2 previous years, and it is heading for yet one more enhance in 2025. Although you will discover successful shares throughout sectors, one particularly has pushed this bull market. That is expertise, led by gamers within the synthetic intelligence (AI) house.
Buyers have flocked to AI shares with the concept the expertise might save corporations money and time — and gas game-changing discoveries and progress, from the event of latest medication to the powering of autonomous automobiles. All of this might supercharge company earnings progress over time, and traders have wished to get in early to learn.
Now, although, after the S&P 500 has reached a number of document highs and after some market members have questioned whether or not AI shares might have what it takes to maintain surging, it is logical to ask the next query: May the bull market roar increased in 2026? Historical past gives a solution that is remarkably clear.
Picture supply: Getty Photos.
Earlier than contemplating the query, although, let’s take a more in-depth take a look at the S&P 500‘s efficiency throughout this AI growth. As talked about, tech shares driving the AI revolution have performed a giant function within the index’s efficiency — in actual fact, the tech powerhouses referred to as the Magnificent Seven have seen their shares climb within the double and triple digits over the previous three years.
Magnificent Seven shares are among the many most closely weighted within the S&P 500, so in the event that they’re making large strikes, they will provide the index course.
Most of those gamers have put a give attention to AI, and in some instances, they’re already producing progress from the expertise. Amazon, for instance, in the latest quarter mentioned its cloud computing enterprise, Amazon Net Companies (AWS), reached an annual income run charge of $132 billion — and that is as a result of huge demand it is seeing for AI services. Nvidia, the world’s main AI chip designer, has seen income surge to document ranges — $130 billion within the newest fiscal 12 months — amid demand for its methods.
All of this has pushed valuations of those shares increased, prompting some analysts in latest weeks to query whether or not an AI bubble could also be forming. In the meantime, we have seen a pullback amongst tech shares in latest days with main names like Oracle and Broadcom tumbling within the first two weeks of December. On the similar time, shares exterior of the AI business have climbed, prompting some to ask whether or not we’re seeing a rotation right into a broader vary of gamers forward of the brand new 12 months.
Now, let’s get again to our query: Will the bull market proceed in 2026? A take a look at historical past gives us helpful clues. Over the previous 50 years, 5 different bull markets made it so far as the present bull market — and every one lasted at the least 5 years, in keeping with Ryan Detrick, chief market strategist at Carson Group.
Bull market
Length
October 1974 – November 1980
6.2 years
August 1982 – August 1987
5 years
December 1987 — March 2000
12.3 years
October 2002 – October 2007
5 years
March 2009 – February 2020
11 years
Information supply: Carson Group
So, with the S&P 500 now within the third 12 months of a bull market, this knowledge gives us a remarkably clear reply to our query. If historical past is true, the S&P 500 bull market will proceed in 2026 and presumably past.
Earlier than cheering, although, it is vital to keep in mind that historical past is not all the time proper. It is doable that on sure events, the market will do one thing surprising — and which means it is doable the S&P 500 will shock us and exit the bull market. Nonetheless, historic traits are helpful as they provide us a view of what could be the most definitely situation.
What does this imply for you as an investor? Proper now, historical past factors to this bull market persevering with in 2026, and robust AI demand, in addition to earnings progress and a decrease rate of interest atmosphere, help this. So, there’s cause to be optimistic about 2026. However this is one of the best information of all: No matter what course the S&P 500 takes within the coming 12 months, the index has all the time superior over the long run, that means shopping for shares and holding them for plenty of years could also be your ticket to a giant investing win.
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Adria Cimino has positions in Amazon, Oracle, and Tesla. The Motley Idiot has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Oracle, and Tesla. The Motley Idiot recommends Broadcom and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and quick January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
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