Wall Street bull Ed Yardeni bets on a "Roaring 2020s," but is more cautious on the AI rally

Odaily News: As a long-time Wall Street bull, Yardeni Research President Ed Yardeni remains highly enthusiastic, having raised his year-end S&P 500 target three times this year, from 7,700 to 8,250, and then to 8,400. He believes the dot-com bubble back then was mainly driven by "fear of missing out" (FOMO), with the S&P 500 forward P/E ratio once rising to 25 times and the tech sector reaching about 55 times. Today, however, the rally is driven by "fantastic earnings momentum" (FEMO). As earnings expectations continue to be revised upward, market valuation multiples have actually declined. Currently, the semiconductor sector trades at around 17 times earnings, while the broader market is at about 20 times—far below the 1999 bubble levels.

Regarding the AI rally, Ed Yardeni is more cautious. He believes there is currently "AI fatigue" in the market, making it difficult to determine the ultimate winners and losers. Therefore, he does not advise investors to directly chase individual AI stocks. For those who want to participate in the AI theme, a more diversified approach through vehicles such as the Nasdaq 100 index fund would be more suitable. (Morningstar)