The US economy is the most dynamic it’s ever been as AI and infrastructure dominate Fed rate hikes, says ‘Big Short’ investor Steve Eisman.

Wall Street has been skeptical about the continued resilience of the US economy in the face of aggressive rate hikes by the Federal Reserve, with some still expecting a recession soon.

But Neuberger Berman senior portfolio manager Steve Eisman is bullish on financial markets and thinks the answer is clear: the naysayers are wrong, as the AI ​​race and the rise of infrastructure projects drive the economy.

“We’re just moving forward, and I think the only conclusion you can come to is that the American economy is more dynamic than it’s ever been in its history,” he told CNBC on Thursday.

Eisman, whose famous bet against toxic mortgages that led to the Great Financial Crisis was portrayed in Big Shortadded that the next phase in the technology narrative will be consumers buying new phones and laptops with AI.

That means Apple, which just unveiled a slew of new AI features, will see a massive refresh cycle of customers upgrading their iPhones, he predicted.

Eisman added that his firm has begun researching which other stocks will benefit from the AI ​​trend, but maintained that investors should stick with any Apple stock they own.

“Definitely maintain your Apple position,” he said. “It’s a very central figure in the whole story.”

Microsoft and Google parent Alphabet, which are developing separate AI technologies, are also “substantial owners,” but Eisman also raised a question he’s been trying to answer.

One intriguing thesis posits that if AI is as successful as people expect, then the cost of creating software will “explode,” implying that the competitive advantages some companies have won’t be so impenetrable, he said.

“So you could argue that the hardware revaluation will continue and that some parts of the software will break,” he added.

In other words, tech hardware companies that supply the AI ​​sector should continue to thrive, but not so much for software stocks.

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Nvidia’s massive rally has illustrated the recent shift toward hardware stocks. Shares of the AI ​​chip leader are up 166% year to date and up more than 200% from this time a year ago, making it a $3 trillion company that accounts for over a third of earnings of the S&P 500 this year. .

And Nvidia’s quarterly earnings show no sign that the rush to stock up on AI chips isn’t slowing.

But relying so much on one stock also represents a big risk, warned Apollo chief economist Torsten Sløk.

“Such high concentration implies that if NVIDIA continues to grow, then things are good,” he wrote in a note on Wednesday. “But if it starts to fall, then the S&P 500 will be hit hard.”

This story originally appeared on Fortune.com