Market expert Ed Yardeni believes that the emergence of advanced AI like ChatGPT could potentially stimulate the stock market, suggesting a return to a bull market like the Roaring 20’s. Yardeni argues that AI’s ability to enhance productivity and living standards could lead to significant economic benefits, reducing concerns about other market factors like Federal Reserve decisions.
The recent rally in stocks since the mid-October low, according to Yardeni, signals a new bull market rather than a bear market rally. He cites the S&P 500’s recent success at breaching the key 4,200 resistance level as an important indicator of this change.
Yardeni’s optimism comes from the potential for generative AI like ChatGPT to increase productivity and improve standards of living across the economy. If this transformation occurs, prevalent investor anxieties, such as fears of a recession or debt ceiling crisis, could be alleviated.
High-profile investors are also showing increasing interest in AI. Big players in investing like Bill Ackman, Stanley Druckenmiller, and David Tepper are placing substantial bets on companies leading in AI technology, including Microsoft, Alphabet, and Nvidia.
Yardeni suggests that this AI-driven shift might lead to the Roaring 2020s, focusing on how technology is enhancing productivity and living standards. This view aligns with the thoughts of billionaire investor Paul Tudor Jones, who anticipates a productivity boom due to large language models and AI that could result in average annualized stock market gains of 15%.
Goldman Sachs also expects a significant impact from AI on the economy, with a recent report indicating that it could potentially raise global GDP by an impressive 7% through streamlining business workflows, automating routine tasks, and leading to a new generation of business applications.