1. The rally is broadening.

For nearly two years, the winners of the AI boom were clear: chipmakers, memory producers and companies involved in AI hardware have enjoyed one of the most remarkable re-ratings in recent market history.
Recent market moves suggest leadership is broadening beyond the chip sector.
Below: Non-AI earnings growth is accelerating.

2. Hyperscalers have seen stock prices lag, with multiples now at the low.

However, GPU economics look favourable with rental rates for NVIDIA chips stable or rising.

We are buyers of Amazon and Microsoft.

3. S&P valuation bands.

Consensus currently expects 2027 EPS at around $400. If that number doesn't really change by year-end and valuations stay around where they are today, that gets you comfortably to around 8000 on the S&P 500.

4. Fund Managers are now sitting on the lowest cash allocation in history.

“The big risk up ahead is that technology companies, especially the hyperscalers, won't beat analysts' earnings growth estimates for the quarter. That could cause a correction among technology stocks. The overall stock market might dodge a correction if investors rotate into sectors that have lagged and report better-than-expected earnings. We are in the rotation camp for the stock market's outlook up ahead," Yardeni says.

5. Central bank reserves shifting from USD to gold.

Gold’s share of global reserves has more than doubled since the early 2000s, reaching 24.5% in 2025. Unlike reserve currencies, gold carries no sovereign issuer and cannot be frozen or sanctioned by another government, making it increasingly attractive in an era of geopolitical uncertainty. The sharp rise during 2024 and 2025 reflects both strong central bank purchases and higher gold prices, which increased the value of existing holdings. As geopolitical fragmentation continues, reserve diversification is likely to remain a defining theme for central banks worldwide.

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