Ed Yardeni, president of Yardeni Research, says air is leaving the artificial intelligence (AI) bubble without a burst. He says bond investors are rationing capital to AI borrowers, while Elon Musk warns 200-plus AI cloud firms could fold.
Ari Wald, Oppenheimer’s head of technical analysis, also rules out a collapse. However, he sees lower highs in small caps and credit that could weigh on holders of both.
Can the Bond Market Police AI Spending?
Yardeni says bond investors are grading AI borrowers more sharply, and faster than credit rating agencies. He sees that discipline as the healthiest outcome.
He summed up the view during the segment.
“I think air is coming out of the bubble without the bubble bursting, which is the best solution to all these concerns.”
Ed Yardeni, CNBC
Musk issued an AI cloud warning over the weekend. He said lenders have largely cut off firms whose only business is AI data centers.
Yardeni concedes some AI companies will fail. Still, he expects stronger players to bail out weaker ones.
Anthropic filed its public registration for an initial public offering (IPO) on Monday. Chip, memory and AI cloud stocks were higher during the segment.
Yardeni says Anthropic could use IPO proceeds to help a struggling AI cloud provider. However, the filing lists general corporate purposes and cites no commitments for material acquisitions or investments.
Does Weak Breadth Still Warn of a Top?
A chart shown on air flagged days the S&P 500 fell 1% or more while more stocks rose than fell. Historically, seven of the 13 such days since 1990 came in 1999 and 2000.
Wald still expects a year-end rally, citing oversold conditions. However, he says lower highs in small caps, market leadership and credit could undermine it. That could set up a market reset in 2027.
Meanwhile, global credit spreads, the extra yield lenders demand over safe bonds, have climbed to their highest since May 2025. Anthropic’s listing will test whether fresh capital backstops weaker AI borrowers, as Yardeni expects. Rising defaults would undercut his read.
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