Why one market vet sees stocks gaining another 26% through 2026 in a 'long-term bull market'

• Market veteran Ed Yardeni still sees plenty of upside left for the stock market.
• Yardeni told CNBC on Wednesday that the S&P 500 could rise 26% through 2026 to 6,500.
• "I think this is a long-term bull market," Yardeni said.

Wall Street's most bullish forecaster isn't backing down from his year-end 5,400 price target for the S&P 500, and he believes there could be plenty of upside beyond that level.

Ed Yardeni of Yardeni Research told CNBC on Wednesday that the S&P 500 could jump 26% through 2026 to 6,500.

"I think this is a long-term bull market. I got still 5,400 by year-end and that was a pretty bold call a year ago, but right now that's looking pretty conservative, and why not more?" Yardeni said. 

The S&P 500 is so far up 8% year-to-date at about 5,150, which is just 5% below Yardeni's year-end stock market projection. 

Yardeni said he was encouraged by the improving breadth of the market, which refers to the number of stocks that are participating in the recent uptrend. Yardeni pointed to the equal-weighted S&P 500 index recently hitting record highs as an example of that, and said that the momentum trade could stall out as more stocks outside of tech rise.

"I think that a broadening of the market is probably what's in store, and I think we're also likely to see less momentum," Yardeni said, adding that elevated bullish sentiment among investors suggests "there may not be enough bears around to convert into bulls to keep the momentum going."

Calling the broadening out of the market "a healthy thing," Yardeni said that bull markets, like this one, could last a long time.

"I think we're way past the point where I have to prove this is a bull market. I think we all know this is a bull market. Bull markets can last a long time until we get hit by another recession, and that requires the Fed to be raising interest rates," Yardeni said.

But with the Fed more likely to be cutting interest rate than hiking interest rates, Yardeni sees no economic recession materializing in the next one to two years.

"I mean the Fed has already raised interest rates. I think inflation is coming down and I think it's going to stay down," Yardeni said.

"So as long as we don't get a credit crunch and have a recession, I think the bull market continues," Yardeni said.