Ed Yardeni Says ‘I’m Not Particularly Concerned’ About AI Slowdown Fears, Maintains 8,400 Year-End S&P 500 Target

In an interview with CNBC, Yardeni stated that existing data center constraints make a significant slowdown in AI infrastructure construction unlikely.

• He said weekend calls for caution around AI are more focused on safeguards than cutting capital spending.
• Yardeni also suggested the U.S. and China could have incentives to cooperate on AI oversight as the technology becomes more powerful.
• Semiconductor stocks sold off sharply in pre-market trading, with SOXL down about 14% and several major chip stocks down more than 5%.

Yardeni Research President Ed Yardeni said Monday that he was “not particularly concerned” about fears of an AI slowdown weighing on markets, even as Nasdaq 100 futures fell as much as 1.5% in pre-market trading.

In an interview with CNBC, Yardeni said concerns that technology companies may slow the pace of AI development were unlikely to derail the broader infrastructure buildout. 

“The reality is there are already constraints in terms of the ability to build data centers and all that,” Yardeni said. “I don’t think that the construction of infrastructure is going to slow.” He maintained his 8,400 year-end target for the S&P 500.

Yardeni Sees AI Investment Continuing

According to Yardeni, calls to slow AI advancement over the weekend may be more about establishing safeguards than reducing capital spending. He said stronger guardrails could become necessary as the technology grows more powerful, but that this would not necessarily undermine the investment cycle.

Yardeni pointed to productivity data as support for the AI-led growth story. He cited strong productivity numbers and a 1.4% unit labor-cost inflation rate, arguing that the economy remains in a “productivity-led technology boom.”

Yardeni's comments come after SpaceX (SPCX) CEO Elon Musk, OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei all raised concerns about aspects of the AI boom over the weekend. Altman even suggested that OpenAI could delay an IPO to focus on safety.

AI Stocks Take A Hit

The market reaction was more cautious Monday morning. The SPDR S&P 500 ETF (SPY) slipped as much as 0.68%, the SPDR Dow Jones Industrial Average ETF (DIA) dropped 0.12%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 1.55% lower. QQQ was among the top trending tickers on Stocktwits, where retail sentiment trended in the ‘extremely bearish’ zone over the past day.

Semiconductor stocks were hit particularly hard, with Direxion Daily Semiconductor Bull 3X Shares (SOXL) also among the top trending on Stocktwits. SOXL price fell about 14% in early morning trade, on track to market its second double-digit decline since August 18.

Marvell Technology (MRVL) led the decline among technology stocks, followed by Nebius Group (NBIS) and Coreweave (CRWV). MRVL stock fell as much as 7.3%, with NBIS stock down 6.9% and CRWV dropped 6.7%. Others like Arm Holdings (ARM), Intel (INTC), Applied Materials (AMAT) and Advanced Micro Devices (AMD) fell over 5% each.

US, China Could Face Similar AI Risks

Yardeni also raised the possibility of greater cooperation between the U.S. and China on AI oversight. He stated that both countries face similar challenges as the technology advances and may have an incentive to establish rules around its development.

“I think there’s just as much pressure on them to put guardrails on the system,” he said. For markets, Yardeni’s view is that AI fears may create short-term volatility, but are unlikely to stop the infrastructure investment needed to support the technology’s continued expansion.

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