Evercore ISI analyst Julian Emanuel issued a "yellow flag" warning about falling free cash flow at major hyperscalers amid surging AI investments. Despite this caution, the firm sees no signs of an AI slowdown, projecting $650 billion in capital expenditures from hyperscalers over the next 12 months.

Emanuel drew parallels between Google's recent 100-year bond issuance and Motorola's 1997 century bond, which preceded a 300%+ rally to the Y2K peak. The firm contrasted the current market with the "exuberant FOMO-driven 1990s Bubble," noting that fundamentals rather than sentiment are still driving stocks.

While high-yield technology spreads have widened due to "AI Disruption" concerns, Evercore maintained its bullish stance, projecting the S&P 500 to reach 7,750 by year-end 2026. The firm recommends investors buy "Enablers, Adopters and Adapters" across communication services, consumer discretionary, and information technology sectors.