Stocks suffered a sharp decline this week as doubts grew about the durability of the artificial intelligence boom after mixed quarterly earnings reports. Ed Yardeni said the cycle faces financial, physical and political constraints, including funding costs, electricity shortages and growing opposition to data centers. He argued that these constraints could promote more efficient capital allocation and reduce the risk of overinvestment. Large cloud service providers would retain access to financing because of their strong balance sheets, while less-capitalized companies could scale back their investments. Yardeni and Oxford Economics said a moderate slowdown could create buying opportunities and ease inflationary pressures rather than signal the end of the AI boom.
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