Wall Street strategists are pointing to signals of euphoria in the AI trade.

The Philadelphia Semiconductor Index (^SOX) has surged roughly 70% since the March 30 market lows, with memory maker Micron (MU) helping fuel a chip frenzy that has also pushed the broader S&P 500 (^GSPC) to 7,500.

Nvidia (NVDA) topped a $5.5 trillion valuation last week, while competitor Cerebras (CBRS) surged 68% on the biggest market debut of 2026.

Even legacy names like chipmaker Intel (INTC) and networking provider Cisco (CSCO) have joined the all-time-high club amid the AI boom. The surge has strategists drawing uncomfortable parallels to the 1999 dot-com era.

“This is borderline mania, if not actual full-fledged mania,” Interactive Brokers chief strategist Steve Sosnick told Yahoo Finance.

“Yes, a lot of that was based on better-than-expected earnings from many of these companies, and better guidance,” Sosnick said. “But were we that mispriced six weeks ago? Are we that mispriced now?“

Evercore ISI noted that the market euphoria “feels like 1999,” though stock valuations today remain far below dot-com-era levels.

Energy prices, however, remain a wild card even as investors have become increasingly numb to triple-digit oil prices.

“Forewarned is forearmed — we will turn more cautious on stocks if Triple Digit Oil is still a talking point on Independence Day,” Julian Emanuel and his team at Evercore wrote.

Inflation is accelerating as higher energy costs become entrenched in the latest consumer and wholesale price data.

“We’re not getting rate cuts this year,” RSM chief economist Joe Brusuelas told Yahoo Finance last week, noting food inflation was headed higher, along with services like shelter and transportation.

“If you’re a forward-looking central banker, in good conscience, you’re not going to be arguing for a rate cut,” he said.

Polymarket assigns a roughly 70% chance that there no rate cuts are coming this year. Meanwhile, Goldman Sachs and UBS have both recently pushed one of their two expected rate cuts from later this year into 2027.

Even as those expectations fade, Wall Street sees higher stock prices ahead.

Yardeni Research raised its year-end S&P 500 target to 8,250 from 7,700 last week after consensus earnings estimates for 2026 and 2027 surged well beyond the firm’s already bullish forecasts.

“We’ve never seen consensus earnings expectations rise so quickly for the current and coming years as they have in recent months,” Yardeni wrote in a client note.

While the chip rally has been the market’s leading trade so far, strategists see plenty of other sectors poised to benefit from the AI theme.