A billion-dollar asset manager says the AI trade remains the defining market narrative, warning investors against looking away as money continues to flow into the story.
In a new CNBC interview, Dan Greenhaus, chief strategist at Solus Alternative Asset Management, says the story extends across sectors, from semiconductor giants to companies still emerging as beneficiaries of the trend.
“This story is so dominant. And every time we come on the show and we talk about should investors move away from the AI story, the argument I always come back to is just there’s a consistent spade of headlines that reinforce the idea that this is the dominant headline and probably should stick with it…
So on the one hand, you have this obviously secular story that’s playing out from Nvidia and Broadcom all the way down to the industrials and what we call the AI beneficiaries. And you have enormous confidence in that in the short term here in the sense that the money keeps being spent, the CapEx (capital expenditures), demand keeps outstripping supply, et cetera.”
Greenhaus tied that optimism back to his outlook for the US equity market, noting that a 7,200 price target for the S&P 500 in the coming months is within the realm of possibility.
“I will remind viewers that my price target coming into the year, not that I publish in the same way that I used to as a sell-side strategist, was 7,000. Obviously, Liberation Day, everybody wavered a bit on that. But I don’t think 7,200 in 12 months is a stretch at all.”
As of Monday’s close, the S&P 500 is trading at 6,693.
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