Ina Tuesday note, the global markets team at Capital Economics moved up its year-end forecast for the S&P 500 from 4,500 to 5,500 in 2024 and from 5,000 to 6,500 in 2025.

A key driver behind that surge higher will be artificial intelligence, it said.

"We think investors' enthusiasm about AI has room to grow even further over the next couple of years," Capital Economics senior markets economists Thomas Mathews wrote. "New technologies – even those that have turned out to be genuinely transformative – have often manifested in the inflation of 'bubbles' in stock prices in the past. We are increasingly of the view that we're seeing something similar now or, at the very least, that we are in a period in which enthusiasm about AI technology could grow further and provide a strong tailwind for equity indices more broadly. "

Mathews is the latest strategist to get behind what's become a growing consensus among firms discussing the outlook for US equities: AI will drive stocks higher.

Bank of America and RBC both referenced AI when boosting their 2023 year-end price targets for the S&P 500, while Goldman Sachs called the S&P 500 undervalued due to AI.

"We assume that widespread AI adoption occurs in 10 years and lifts trend real GDP growth by 1.1 percentage point for 10 years. In this scenario, earnings per share in 20 years would be 11% greater than our current assumption and the S&P 500 fair value would be 9% higher than today, holding all else equal," Goldman Sachs strategist Ryan Hammond wrote in a note on June 6.

The mentions of AI in Wall Street commentary has followed a first-quarter earnings season littered with the word.

There are companies that have laid out clear revenue streams like Nvidia (NVDA), whose current quarter expectations for $11 billion in revenue topped Street estimates for $7.2 billion. There are others with clear strategies and use cases, like the search wars between Microsoft (MSFT )and Google (GOOGL). And there are even some consumer businesses like Best Buy (BBY) that plan to use AI to help summarize customer calls.