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Is the AI Bubble Bursting? Not Yet, Says Dan Farley

Watch on YouTube ↗  |  June 24, 2026 at 12:59  |  3:03  |  Bloomberg Markets
Speakers
Dan Farley — State Street Investment Management Executive Vice President, CIO Investment Solutions Group

Summary

Dan Farley of State Street Investment Management argues the AI-driven equity rally is not a bubble and has further to run. He points to strong earnings growth and price multiple contraction as support, making the S&P 500 attractive despite higher valuations. The semiconductor rally remains intact, though earnings disappointments and a potential spike in US 10-year yields pose key risks.

  • Global tech sell-off raises bubble fears; Dan Farley says calling a top is premature.
  • Equities remain broadly supported by earnings-led returns and not stretched multiples.
  • S&P 500 valuations can hold as earnings growth continues and upgrades persist.
  • Semiconductor/AI rally still has upside; normal pullbacks like Micron's are expected.
  • Key risk: AI companies missing on earnings could spark volatility.
  • Additional risk: a sharp rise in US 10-year yields to 5% would hit AI stocks hardest.
Ideas
Dan Farley State Street Investment Management Executive Vice President, CIO Investment Solutions Group 0:37
S&P 500 rally supported by earnings
The AI-driven equity rally is not a bubble and still has room to run. Valuations on the S&P 500 are not cheap, but they are supported by strong earnings growth and price multiple contraction, which indicate a healthy environment. Earnings-led returns and ongoing upgrades suggest the rally can continue.
SPY HIGH
Dan Farley State Street Investment Management Executive Vice President, CIO Investment Solutions Group 2:24
AI chip rally has more room
The semiconductor and AI-driven rally still has room to grow, and pullbacks like Micron's 8% drop are normal along the trend. However, the sector faces two main risks: failure to deliver on earnings expectations, and a significant rise in interest rates (e.g., US 10-year moving toward 5%), which would make AI stocks more vulnerable than the broader market.
SOXX MED
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This Bloomberg Markets video, published June 24, 2026, features Dan Farley discussing SPY, SOXX. 2 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Dan Farley  · Tickers: SPY, SOXX