U.S. equities have staged a remarkable rally in the first half of this year, but is the bull market still on firm footing, and how optimistic should investors be now?

If I think about the series of earnings reports that we'll get in the second half of this year.

There will be a lot of focus on what is the potential revenue gains and earnings

contributions coming from all this investment that's being made in AI. There's a lot of

questions around that. I'm Allison Nathan and my colleague in Goldman Sachs research David Kostin, Chief U.S. Equity Strategist.

David recently boosted his S&P Chief U.S. Equity Strategist.

David recently boosted his S&P 500 year-end target

from 5200 up to 5600.

We'll talk about what's changed, what investors should focus on now, and what the rest of the year could bring.

David, it is great to have you back on the program.

Allison, thanks for inviting me.

David, when you made your recent upgrade, you made the very interesting observation that five stocks have been responsible for 60% of the rally year to date.

There's so much focus on market concentrations today. Is that concentration concerning to you at all?

I think the best way to frame the return for the U.S. equity market this year

is to keep two numbers in mind. The first is that the S&P 500 index, which is a capitalization

weighted index, has risen by 15% year to date. In comparison, the typical stock has risen 5%.

And that difference is really a reflection

of the point you made that five leading stocks

mostly associated with artificial intelligence,

they have driven the market capitalization

index up 15%. So those companies include

invidia, Amazon, Microsoft, Google, also knows Alphabet, and Meta.

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