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

• The AI-driven equities rally is not considered a bubble and is expected to continue.
• Strong earnings growth and upgrades for the rest of the year are supporting current valuations, despite them not being 'cheap'.
• Price multiple contraction in many markets is seen as a 'healthy environment'.
• Primary risks to the rally include companies failing to meet earnings expectations and a significant upward movement in interest rates, particularly the US 10-year yield towards 5%.

Dan Farley of State Street Investment Management believes the AI-driven equities rally is not a bubble and still has room to grow, supported by strong earnings and upgrades. While valuations are not cheap, they are justified by company performance. Key risks include companies failing to deliver on earnings and a significant rise in interest rates.