Wells Fargo's Ohsung Kwon Presents Bullish Year-End Equity Outlook on CNBC

This analysis is based on the CNBC Power Lunch segment featuring Wells Fargo’s Ohsung Kwon [1], published on November 7, 2025, where he presented a bullish outlook for equity markets heading into year-end. Kwon’s appearance reinforces Wells Fargo’s established positive market stance, emphasizing opportunities for investors to “buy the dip” and supporting the thesis for continued equity index rallies [1][2].

The market context surrounding Kwon’s comments reveals a complex landscape. Major indices show mixed 30-day performance, with the S&P 500 gaining 1.01% to 6,729.02, NASDAQ Composite up 1.77% to 23,006.12, and Dow Jones Industrial adding 1.24% to 46,880.80 [0]. However, the Russell 2000 declined 0.74% to 2,424.48, indicating potential divergence between large and small-cap stocks [0]. Sector performance on November 7th was notably uneven, with Financial Services leading at +2.30%, Utilities surging +4.68%, Energy gaining +1.81%, while Technology showed only modest gains of +0.05% [0].

Wells Fargo’s bullish thesis is underpinned by ambitious targets including a year-end 2025 S&P 500 target of 6,650 and a 2026 target of 7,200 [2]. The firm forecasts 11% EPS growth for 2025-2026, accelerating to 12% in 2027 [2]. This outlook heavily emphasizes AI-driven growth, with Kwon famously stating that “Music stops when AI capex stops. Enjoy the party” [2], indicating the critical importance of continued artificial intelligence capital expenditure to sustain the rally.

Several cross-domain correlations emerge from this analysis. The strong performance of Wells Fargo itself (WFC stock up 22.58% year-to-date to $86.04, with a reasonable P/E ratio of 14.17) [0] provides credibility to Kwon’s market outlook. However, the sector rotation patterns reveal important insights - the exceptional utility sector performance (+4.68%) alongside financial strength suggests defensive positioning alongside economic optimism [0], while technology’s modest gains may indicate either AI theme fatigue or a healthy rotation away from overextended sectors.

The divergence between large-cap indices and small-cap performance (Russell 2000 down 0.74%) [0] suggests that any year-end rally may be concentrated rather than broad-based. This concentration risk is particularly relevant given Wells Fargo’s heavy emphasis on AI-driven growth, which could lead to market vulnerability if AI capital expenditure patterns shift.

The analysis reveals several significant risk considerations that warrant attention. The heavy dependence on AI capital expenditure sustainability represents the most critical vulnerability - Kwon’s thesis explicitly states that the “music stops when AI capex stops” [2], making AI spending patterns the primary determinant of market trajectory. Additionally, valuation concerns emerge despite the bullish outlook, as the market’s extended rally raises questions about sustainability without corresponding earnings acceleration. Economic data dependency also presents risk, as the positive outlook assumes continued economic stability and supportive monetary policy conditions.

Despite these risks, the analysis identifies clear opportunity windows. The sector rotation toward financial services (+2.30%) and utilities (+4.68%) [0] suggests potential for continued outperformance in these areas. Wells Fargo’s specific targets provide concrete reference points - with the S&P 500 at 6,729.02 [0] versus their 6,650 year-end target [2], there appears to be room for upside if their thesis materializes. The “buy the dip” strategy Kwon advocates could be particularly effective in the current market environment, given the mixed performance across sectors and indices.

The market data shows a complex but generally positive environment supporting Kwon’s bullish thesis. Major indices are trading above Wells Fargo’s year-end targets in some cases, with the S&P 500 at 6,729.02 [0] versus their 6,650 target [2], suggesting either conservative targets or potential for consolidation. The sector performance indicates a nuanced rally rather than broad-based advance, with financial and utility sectors leading while technology shows relative weakness [0].

Wells Fargo’s own strong performance (WFC up 23.23% over one year to $86.04) [0] lends credibility to their market outlook. The firm’s earnings growth forecasts of 11% for 2025-2026 and 12% for 2027 [2] provide fundamental support for their equity targets. However, the heavy concentration on AI themes creates concentration risk that investors should monitor closely through AI-related earnings announcements and capital expenditure data.

The mixed market performance, with large-cap strength versus small-cap weakness, suggests investors should consider sector-specific opportunities rather than assuming broad market participation in any year-end rally. The defensive positioning indicated by utility sector strength alongside financial sector optimism suggests a market environment that could support both growth and value strategies through year-end.