Investors should prepare for a major test in the next 12 months as artificial intelligence-driven market gains may falter. That warning comes from MacroResearchBoard, a research firm that is now pulling back on U.S. stocks.
The firm cites two primary concerns: a looming AI disappointment and rising bond yields. These factors together create a difficult environment for equities, particularly for the tech-heavy sectors that have led market rallies.
AI enthusiasm has driven significant stock market growth over the past year. But MacroResearchBoard argues that current valuations are pricing in unrealistic expectations. If companies fail to deliver on promised AI profits, a correction could follow.
Rising yields are the second major risk. Higher yields make borrowing more expensive for companies, which can squeeze profit margins. They also make bonds more attractive relative to stocks, pulling money away from equities.
The research firm advises reducing exposure to U.S. stocks in the near term. It recommends shifting toward defensive sectors and international markets that may be less sensitive to these pressures.
Other analysts share similar concerns. Some point to slowing growth in AI-related revenue and increasing regulatory scrutiny as additional headwinds. The combination of these factors creates a cautious outlook.
Investors should monitor earnings reports from major tech companies closely. These reports will offer the clearest signal on whether AI investments are translating into real profits or falling short of expectations.
MacroResearchBoard’s warning is not a call for panic, but for prudence. The next 12 months could test the resilience of markets that have grown dependent on AI optimism and low yields.
