The No. 1 Vanguard Index Fund on Robinhood Could Soar 138% With Help From AI, According to a Wall Street Analyst

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On the trading platform Robinhood, the Vanguard S&P 500 ETF (VOO) is one of the most frequently held exchange-traded funds (ETFs). This investment ranks as the sixth most preferred equity choice among Robinhood’s clientele, which are predominantly younger adults who are accustomed to taking risks.

In my opinion, investing in the Vanguard S&P 500 ETF might not be a risky move for those with a long-term perspective who are content to keep their funds in the fund for multiple years. According to Tom Lee at Fundstrat Global Advisors, the S&P 500 could potentially reach 15,000 by 2030, representing a significant increase of approximately 138% from its current value of around 6,297.

Essentially, Lee’s forecast suggests a similar potential for gains in the Vanguard S&P 500 ETF. Here are some key points investors need to be aware of.

The Vanguard S&P 500 ETF provides exposure to hundreds of U.S. stocks

The Vanguard S&P 500 ETF follows a wide range of 500 significant American corporations. This mix consists of both value and growth stocks across all 11 market sectors, accounting for over 80% of the U.S. stock market’s total worth. Notably, this index fund places the greatest emphasis on companies in the technology sector. Here are the top 10 investments, ranked by their relative importance:

[Insert Top 10 Holdings List]

  1. Nvidia: 7.3%.
  2. Microsoft: 7%.
  3. Apple: 5.8%.
  4. Amazon: 3.9%.
  5. Alphabet: 3.5%.
  6. Meta Platforms: 3%.
  7. Broadcom: 2.4%.
  8. Berkshire Hathaway: 1.6%.
  9. Tesla: 1.6%.
  10. JPMorgan Chase: 1.5%.

In simple terms, the S&P 500 has grown by approximately 95% over the last five years, which translates to a yearly growth rate of around 14.3%. Tom Lee’s forecast suggests that this growth could be even more substantial in the next five-and-a-half years or so. For the S&P 500 to reach 15,000 by the end of the decade, it would require an average annual return of over 17%.

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Why Tom Lee thinks the S&P 500 can reach 15,000 by 2030

According to Tom Lee’s belief, both artificial intelligence (AI) and the millennial generation will contribute significantly to the S&P 500 reaching a milestone of 15,000 by the year 2030. It is important to note that the index currently has a heavy concentration in the technology sector, which stands to gain substantially from growing demand for AI hardware, software, and services.

It’s especially relevant due to the projected global labor shortfall amounting to 80 million workers by 2030. In fact, over 40% of S&P 500 companies have already discussed AI during their first-quarter earnings discussions. Given that an increasing number of businesses are adopting automation, historical trends indicate that technology stocks could yield significant gains, potentially pushing the S&P 500 upward.

Lee explains:

From 1948 to 1967, as well as from 1991 to 1999, the world experienced a period of labor scarcity accompanied by a significant surge in the value of technology-related stocks. This trend appears to be repeating itself today.

As I stand by, it’s evident that millennials, those born between 1981 and 1996, are the most populous generation currently alive. They are leaving an indelible mark on our economy with their unique spending habits, and predictions suggest they will amass a staggering $46 trillion in wealth from their baby boomer parents’ inheritance. This influx of millennial spending is expected to propel the U.S. economy forward and potentially drive the S&P 500 to unprecedented heights in the coming years.

I find Lee’s projection somewhat overly positive, given that the S&P 500 is currently trading at 22.2 times its future earnings, a high valuation that typically translates into annual returns of only about 3% over a three-year period, as suggested by Apollo Global Management. Nevertheless, with AI being a groundbreaking driver and the increasing influence of the millennial generation, we can expect reasonably robust returns in the coming years.

Essentially, regardless of whether you agree with Lee or not, investments like the Vanguard S&P 500 ETF, which are based on the S&P 500 index, have a strong historical track record. Over the past three decades, this benchmark index has consistently generated positive returns for every 11-year period, implying that anyone who purchased an S&P 500 index fund since 1995 and held it for at least 11 years would have made a profit.

In my opinion, it’s wise for investors to consider investing a part of their funds into an S&P 500 index fund. The Vanguard S&P 500 ETF is a recommended choice due to its low expense ratio of 0.03%. This means that shareholders will only pay $3 annually for every $10,000 invested in the fund.

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2025-07-21 10:55