Profit forecasts remain strong, but Société Générale strategist Albert Edwards sees weaker technology revisions, a narrower spread of analyst upgrades, liquidity pressures and inflation as risks for AI-related stocks.
Edwards said profit-growth forecasts remain strong, even as technology earnings revisions and the breadth of analyst upgrades have weakened.
He said thinning liquidity could leave riskier assets, including equities and semiconductor stocks, more vulnerable to pressure. He also pointed to near-term inflation readings and higher prices for corporate output.
Edwards linked today’s AI investment cycle with conditions preceding Asia’s 1997 financial crisis, citing substantial spending alongside modest productivity gains.
He also raised a scenario in which interest rates would climb by more than 200 basis points, without setting out a forecast or schedule. EconoTimes previously covered Fed Gov. Michelle Bowman's warning that disappointing AI returns could prompt an equity correction.
