Veteran Wall Street strategist Ed Yardeni has expressed his exasperation with the rapidly changing perceptions surrounding artificial intelligence. According to Yardeni, the initial AI optimism that fuelled last year’s stock market rally has morphed into AI fatigue, then AI fear, and now what he terms “AI Derangement Syndrome”. This shift in sentiment reflects a broader re-evaluation of AI’s potential impact on the economy and workforce.
Initially, AI was viewed as a tool to enhance productivity across various sectors. However, Yardeni notes that concerns have grown, with AI now perceived by some as a threat capable of disrupting numerous businesses and eliminating jobs. This more pessimistic outlook contrasts sharply with the earlier enthusiasm that drove significant market activity.
Yardeni’s own experience with AI tools, such as Claude Pro, has reinforced his belief in AI’s potential to enhance productivity without necessarily displacing human workers. He cited an example where Claude quickly generated HTML code for a Fed Policy Stance Meter, a task that will now be integrated into his firm’s daily workflow to improve team efficiency.
Regarding investment strategy, Yardeni continues to recommend market-weighting S&P 500 information technology, communications services, and financials. He also advises overweighting industrials, healthcare, and materials. Yardeni’s overall investment approach favours a global perspective, recommending investors “Go Global” rather than focusing solely on domestic markets.
