Market Euphoria and the AI Religion

The report warns that the current AI-driven market rally is a 'religion' characterized by extreme euphoria and vertical momentum that ignores rising bond yields. It highlights that the S&P 500's $30 trillion rally since ChatGPT's launch may be an over-extrapolation of AI's actual value creation.

Key Takeaways

• 1.Macro optimism and market pricing of US growth have exceeded Goldman Sachs' 2027 forecasts, suggesting extreme euphoria.
• 2.The market is exhibiting a vertical momentum rally in semiconductors and AI-related stocks that historically does not persist.
• 3.There is a significant 'jaws gap' between tech stock performance and interest rates, suggesting the market is ignoring bond yields.

Table of Contents

• Religion
• Too euphoric
• Momentum melt-up
• The jaws gap
• Last time around
• AI is great, but…

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