Market bounce back has to do with spending hyperscalers are planning: Yardeni Research's Ed Yardeni
Watch on YouTube ↗  |  February 06, 2026 at 21:06 UTC  |  5:24  |  CNBC
Speakers
Ed Yardeni — President, Yardeni Research

Summary

  • The "Magnificent 7" tech giants are engaging in a massive spending war ($650 billion estimated this year), creating a "Game of Thrones" environment where they are turning on each other to compete for AI dominance.
  • While this spending creates volatility and potential underperformance for the tech giants themselves (e.g., Amazon down 8%), it acts as a massive stimulus for the broader economy and the remaining 493 stocks in the S&P 500.
  • The US economy is showing resilience with Atlanta Fed GDP estimates tracking near 5%, driven by this corporate spending and incoming tax refund checks.
  • Broad asset inflation is occurring ("Happy Days are here again"), lifting not just stocks but also Gold and Bitcoin.
Trade Ideas
Ticker Direction Speaker Thesis Time
GOLD /BTC
LONG Ed Yardeni
President, Yardeni Research 		Yardeni observes that "Happy days are here again" and investors are buying everything, specifically highlighting Gold and Bitcoin alongside stocks. The combination of massive corporate spending (stimulus) and large government tax refund checks is creating a liquidity-rich environment. This money is flowing into alternative assets, driving prices up across the board. Both asset classes are performing "extremely well" in the current environment. Not explicitly mentioned, but generally tied to liquidity drying up or a shift in economic sentiment. 0:24
BROAD MARKET /S&P 493 /DOW JONES
LONG Ed Yardeni
President, Yardeni Research 		While the tech giants fight, the rest of the market (the "Impressive 493" and the Dow Jones Industrial Average) is performing extraordinarily well. The $650 billion being spent by the hyperscalers flows directly into the revenues of other companies. Building data centers requires 500 to 1,000 different vendors—including steel, concrete, wiring, and power. This acts as a massive economic stimulus, boosting GDP to ~5% and lifting the earnings of industrial and broader market companies. The Dow Jones is hitting record highs, and the economy has remained resilient despite high interest rates and inflation. A potential realization that the AI capital spending will not be profitable could eventually hurt the broader sentiment. —
AI VALUE CHAIN
LONG Ed Yardeni
President, Yardeni Research 		The market is cheering the "arms dealers" of the AI war. While Amazon (the spender) fell 8%, Nvidia (the seller) rose 7%. The companies *selling* the tools and infrastructure for the AI build-out are the immediate beneficiaries of the $650 billion spending spree. They receive the cash flow now, while the hyperscalers take the risk on future profitability. Nvidia up 7% on the same day Amazon dropped 8%. If hyperscalers cut spending due to lack of ROI, vendor revenues will collapse. —