Even as investors warn that an artificial intelligence-driven rally has already stretched U.S. stock valuations, one Wall Street voice argues the boom may just be getting started. Edward Yardeni, known for calling the market bottom during the COVID-19 pandemic, puts the odds at 80% that the current upswing runs into the early 2030s.
"80% Chance the Boom Continues" — S&P 500 to 10,000 by 2029
Yardeni, president of independent research firm Yardeni Research, expects the U.S. stock boom driven by AI and technological advances to extend into the early 2030s, The New York Times reported on the 2nd. He sees an 80% probability that the current bull market lasts for several more years.
Since the early 2020s, Yardeni has described the present period as the "Roaring 2020s," forecasting productivity gains from technological progress and a strong equity market. He recently reinforced that view, saying the bull run could stretch beyond this decade into the early 2030s.
The S&P 500 had climbed 138% from the end of 2019 through the 26th of last month. Of that trajectory, Yardeni said, "Maybe this is the beginning."
He is also sticking with his projection that the S&P 500 could reach 10,000 by the end of 2029. That would put the index's gain for the 2020s at 209.5% — the third-highest decade-long advance since the 1870s, according to Joe Abbott, chief quantitative strategist at Yardeni Research.
Yardeni does not consider the target overly optimistic. Since World War II, U.S. stocks have returned an average of about 7% a year on price alone and about 10% a year including reinvested dividends. If the S&P 500 hits 10,000 before the end of 2029, he said, he may raise the target further.
"AI Is Real" — Corporate Earnings and Productivity Drive the Bull Market
Yardeni's core case for a long bull market rests on technological advances, AI chief among them, and on corporate earnings. Since ChatGPT's debut in November 2022, he has argued that AI can lift corporate productivity and generate enormous profits.
Appearing on CNBC's "Squawk Box" last month, he characterized the rally not as investor FOMO, or fear of missing out, but as FEMA — "Fabulous Earnings Momentum." The point is that share prices are being supported by rising corporate profits rather than by froth or expectations alone.
At the time he set a year-end 2026 target of 8,250 for the S&P 500. Applying a price-to-earnings multiple of about 20 to the market's expected 2027 earnings per share of $400 for S&P 500 companies would put the index around 8,000, he reasoned, and actual results may beat those forecasts.
Yardeni has a track record of calling market bottoms with relative accuracy. He identified the bear-market low in March 2020, as COVID-19 was spreading, and by August of that year was forecasting the start of a new boom. He predicted that pent-up consumer demand would revive the economy first, with technological progress driving growth thereafter.
"Whichever Party Is in Power" — War, Inflation and Bond Yields Are the Variables
Yardeni stopped short of guaranteeing that the advance will continue. He listed the wars involving Iran and Ukraine, tariff disputes, intensifying U.S.-China competition and uncontrolled inflation as risks that could shake the long boom.
He drew a line, in particular, at shifting his market outlook based on political variables. Playing down the chance of a near-term U.S. recession, he said, "We've learned that the U.S. economy is remarkably resilient no matter which party is in power."
He is also watching bond yields. Yardeni said the 10-year U.S. Treasury yield remains in the 4% to 5% range he considers normal, so it is not yet a major concern. He was more wary that widening fiscal deficits, policy uncertainty and large-scale bond issuance by the U.S. Treasury and AI infrastructure companies could push yields higher.
Deregulation could energize the market, he said, but it could also lead to excessive risk-taking. "Busts follow booms," Yardeni said, warning that investors may forget about risk during good times and repeat the same mistakes.
