The rise of ChatGPT, a generative artificial intelligence language model, has market veteran Ed Yardeni envisioning a future filled with promise for the stock market. Yardeni asserts that the emergence of ChatGPT could potentially usher in a new bull regime akin to the Roaring 20’s. In a recent note, Yardeni expressed his belief that the rally in stocks since the mid-October low signifies the beginning of a bull market, rather than a mere bear market rally. He highlighted the S&P 500’s successful test of the crucial 4,200 resistance level and its subsequent surpassing of the February 2 closing high of 4,179 as indicators of this newfound bullish sentiment.
Yardeni attributes the market’s ability to overcome numerous worries to the predictions made by Wall Street’s Worriers. These analysts had warned of potential crises in banking and the debt ceiling, which could exacerbate an already anticipated recession. However, what truly excites Yardeni is the potential impact of generative AI, specifically chatbots like ChatGPT, in sparking a surge in productivity and enhancing living standards across the entire economy. If this scenario unfolds as anticipated, it could alleviate many of the concerns burdening investors, such as the looming threat of recession, banking crises, and the potential disaster surrounding the debt ceiling.
“This may be the event that launches the Roaring 2020s. If so, then we can spend a lot less time obsessing about what the Fed will do next and focus on how technology is boosting productivity and the standard of living throughout the economy,” Yardeni remarked with a sense of enthusiasm and optimism.
Yardeni is not alone in his optimistic outlook regarding the positive impact of generative AI on economic growth. Billionaire investor Paul Tudor Jones recently shared his belief with CNBC that AI will drive a productivity boom comparable to the transformative effects brought about by personal computers in the 1980s and the internet in the 1990s. Jones even boldly predicted that the stock market could potentially witness average annualized gains of 15%.
Joining the optimistic sentiment, Goldman Sachs, a renowned investment bank, also recognizes the profound influence of AI on the economy. In a recent note, Goldman Sachs argued that AI has the potential to boost global GDP by an astounding 7%. They emphasized the capacity of generative AI to streamline business workflows, automate routine tasks, and pave the way for a new generation of innovative business applications.
With industry veterans like Yardeni, influential investors like Jones, and esteemed institutions like Goldman Sachs recognizing the profound impact of generative AI, there is a growing consensus that the emergence of ChatGPT has set the stage for a stock market boom and unprecedented economic prosperity. As these intelligent systems continue to evolve and unleash their potential, the world eagerly anticipates the dawn of a new era marked by remarkable technological advancements, enhanced productivity, and a higher standard of living for all.