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According to the professor, the rally in AI stocks is far from over

Expectations of a pause in Fed interest rate hikes are one of the main drivers of the current rally, Siegel said in in an interview with CNBC.

As you know, I have already warned that the Fed is going too far as the lagged effect of monetary policy accumulates to a downturn in the second half of the year. If they can take a break now, it will make it less likely that there will be a recession

Siegel is watching labor and housing data to determine the Fed’s next move.

The economy is roaring along with no apparent slowdown, but we shouldn’t assume the opposite, i.e. that everything is booming

– He told.

When asked if the stock market will rise or fall in the near term, Siegel said he doesn’t think the former is in the offing, but noted that artificial intelligence has given tech stocks a strong boost in recent weeks. like Microsoft and Nvidia. The rally of these stocks was also visible in the broader market, with the Nasdaq 100 and the S&P 500 rising by around 33 percent and 10 percent, respectively, since the beginning of January.


These sectors could catch fire, and that fire could continue to burn well into the summer

Siegel said of the tech industry. He also reiterated his view that the craze for AI stocks is nowhere near a balloon, while noting that valuations may end up being overblown.

Cover image: Matt Stroshane/Bloomberg via Getty Images