AI's impact on software stock prices is overdone, says Yardeni Research's Ed Yardeni

• Yardeni Research recommended underweighting the 'Magnificent Seven' tech stocks on December 7 due to concerns about competition and data center spending.
• The 'get out of Dodge' trade (away from tech giants) has been ongoing since late October, with AI euphoria turning into 'AI fatigue' and 'AI derangement syndrome'.
• AI is seen as a great tool for productivity, but the market's reaction to it has been extreme.
• He suggests being a stock picker in software rather than buying ETFs, as some companies will succeed while others won't.
• Recommends overweighting industrials, healthcare, and materials, and going global rather than staying home (US-focused).

Ed Yardeni of Yardeni Research discusses the tech trade, noting that the euphoria around AI and the 'Magnificent Seven' is overdone. He recommends rebalancing portfolios by underweighting tech giants and overweighting global markets, industrials, healthcare, and materials, while viewing AI as a long-term productivity booster.