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The post Moody’s top economist pokes holes into sustainability of AI stock rally appeared com. Moody’s Analytics chief economist Mark Zandi has raised concerns over the long-term sustainability of the artificial intelligence (AI) stock rally, warning that the economic momentum driven by surging tech valuations may not last. In an analysis shared in an X on November 9, Zandi noted that soaring stock prices in AI-related companies have played a pivotal role in fueling U. S. economic growth. He linked much of the recent economic expansion to the “wealth effect,” where increased household wealth from rising equity markets spurs consumer spending. It’s hard to overstate the significance of the soaring stock prices of artificial intelligence companies to the economy. Spending by well-off Americans, driven by their surging stock portfolios, is the single most significant driver of growth. This so-called wealth effect is. pic. twitter. com/I1aobpZDEP Mark Zandi (@Markzandi) November 9, 2025 According to his estimates, this effect has added nearly half a percentage point to real GDP growth over the past year, accounting for about a quarter of total economic expansion. Zandi highlighted that affluent Americans, whose stock portfolios have ballooned amid the AI boom, are propelling much of this spending. He pointed out that this pattern has been a consistent tailwind for growth since the recovery from the 2008 Global Financial Crisis. Impact of household wealth However, the economist cautioned that the rapid rise in household net worth compared to income levels raises questions about sustainability. Household wealth now stands at roughly eight times after-tax income, well above the historical average of 5. 5 times recorded between World War II and the financial crisis. The economist also cited strong housing wealth and the pandemic-era cash reserves still held by wealthier households as additional contributors to spending power. Yet he warned that such imbalances could pose risks to future growth if stock market gains, particularly in AI-related sectors,.