Yardeni Research President Ed Yardeni has raised his S&P 500 year-end target three times this year, lifting it from 7,700 to 8,250 and then to 8,400. According to Odaily, he said the current rally is being driven by strong earnings momentum rather than the fear of missing out that fueled the dot-com bubble.

Yardeni said the S&P 500 forward price-to-earnings ratio once reached 25 times during the internet bubble, while technology stocks traded at about 55 times. He said current valuations are lower, with semiconductors at about 17 times earnings and the broader market at about 20 times.

He said the “Roaring 2020s” still have about an 80% chance of continuing if the U.S. economy avoids recession. He added that even geopolitical shocks have historically created opportunities to re-enter the market.

On AI stocks, Yardeni was more cautious. He said there is “AI fatigue” in the market and that it is difficult to identify the eventual winners and losers. He said investors who want exposure to AI may be better off using diversified vehicles such as Nasdaq 100 index funds.