Wall Street has been puzzled by whether the US economy can continue to be resilient under the circumstances of significant interest rate hikes by the Federal Reserve, and some still expect it to enter a recession soon.

But Steve Eisman, a senior investment portfolio manager at Neuberger Berman, is bullish on the financial market. He believes that the answer is clear: pessimists are wrong as the increase in the artificial intelligence competition and infrastructure projects will drive economic development. Eisman was famously portrayed in the movie The Big Short for his bet against mortgage loans before the big financial crisis.

Last Thursday, he said, "We are pushing forward with everything we have, and I think the only conclusion you can come to is that the US economy is more vibrant than at any time in history." He added that the next phase in the technology industry will be consumers buying new artificial intelligence smartphones and laptops.

He predicts that this means Apple, which has just released a series of new artificial intelligence features, will see a large update cycle as customers upgrade their iPhones.

Eisman added that his company has already begun researching which other stocks will benefit from the artificial intelligence trend, and he believes that investors should hold Apple's stock. He said, "You have got to hold Apple's stock. It is the centerpiece of the whole story."

Microsoft, which is developing independent artificial intelligence technology, and Alphabet, the parent company of Google, are also "core holdings," but Eisman also raises a question he has been trying to answer.

He said an interesting argument is that if artificial intelligence is as successful as people expect, the cost of developing software will "collapse," which means some companies' competitive advantages will not be as unbreakable.

He added, "So you could say the revaluation of hardware will continue and some parts of software will be devalued."

In other words, technology hardware companies that provide services to the artificial intelligence industry should continue to prosper, but software sectors will not be as prosperous.

Nvidia's sharp rise reflects the recent trend of investors turning to hardware stocks. So far this year, the stock price of the artificial intelligence chip leader has skyrocketed 166%, up more than 200% from the same period last year, making it a company with a market value of $3 trillion that accounts for more than one-third of the S&P 500's gains this year.

And Nvidia's quarterly earnings also indicate that the craze for hoarding artificial intelligence chips has not slowed down.

But Torsten Slok, chief economist at Apollo, warned that relying too heavily on one stock could also bring huge risks.

He wrote in a report last Wednesday, "Such high concentration means that if Nvidia continues to rise, the situation will improve. But if it starts to fall, the S&P 500 index will suffer a heavy blow."

Edited by Jeffrey