Nvidia's (NVDA) earnings have been in focus for most investors, but there is a lot more than just AI to watch.

Yardeni Research President Ed Yardeni tells Yahoo Finance that the broader US economy is showing resilience amid uncertainty and "the stock market reflects that."

Starting at about 00:02:35 in the video above, Yardeni explains how he expects the S&P 500 will reach 6500 by the end of 2026, boosted by companies emphasizing productivity which he believes will lift markets "higher." He also notes "it's fairly clear" the US economy is outpacing global economies like China and Europe.

Additionally, Yardeni believes the US economy "is showing enough strength" that domestic momentum could "offset" international weakness.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

SEANA SMITH: The S&P 500 hovering under that 5,000 mark since it did close above that benchmark level for the first time on February 9.

Our next guest saying that he still sees some upside for the broader S&P 500 index, 30% upside over the next two years. Let's talk about all that with Ed Yardeni. He is the President of Yardeni Research.

Ed, it's good to have you here. So put this in perspective. We're focused so much on this NVIDIA report after the bell. As a strategist here, obviously, you're positioning for the longer term. How are you looking at results potentially from tonight and what that means for your strategy going forward?

ED YARDENI: Well, I think it's a very short-term story right now. Clearly, it's just going to happen today. And I think once the excitement of the expectations of what will happen, I think we'll find that the market settles down a bit. This is, obviously, viewed as a big deal. But, overall, there's more going on in this economy than just NVIDIA or artificial intelligence.

The reality is that the economy's proven to be remarkably resilient. It continues to grow at a good pace. Inflation has come down, despite the fact that the unemployment rate remains below 4%. So it's been a great economy. And the stock market reflects that.

And I don't think the AI story is the entire story here.

BRAD SMITH: The high on the Street for NVIDIA and the price target is $1,200 here. So it says a little bit more than perhaps a short-term story. But from your perspective, where is that long-term story that investors perhaps should be paying attention a little bit more here within the generative AI landscape?

ED YARDENI: Well, I think the AI is one of the technologies out there that are going to do a great job of increasing productivity in our country. We've got a significant labor shortage. I think that's the big problem we have in the economy. And one of the ways that we can solve that labor shortage is to see companies investing in technology and machinery, and so on, and onshoring with state of the art manufacturing facilities.

All that is likely to push productivity growth higher. We already had a really good year last year for productivity growth. It accounted for a good amount of our real GDP growth. And I think that's going to continue to be the case.

So I think the big story is productivity is going to grow. Technology is going to enable that. It's not just AI. And in that scenario, I see the stock market continuing to go higher, even if AI turns out to be somewhat disappointing in terms of relative to expectations because the expectations are awfully high right now.

SEANA SMITH: And let's talk a little bit more about your expectations, not only through year end. We also talked about your target-- S&P target by the end of 2026 getting all the way to 6,500, I believe.

In terms of those catalysts here-- you mentioned productivity. That's improving-- what else do you see in terms of leading the market higher over the next two years?

ED YARDENI: Well, I think it's fairly clear right now anyways that the US economy is doing a lot better than most other economies. China's economy is likely to remain depressed for the next few years.

We have a precedent of property bubbles in Japan, property bubbles in the United States. Property bubbles take five to seven years before you really come out of the depressing impact that they have on your economy.

So China looks like it's going to be depressed. But the good news for us is that means they will continue to export deflation, which will keep our inflation rate down, at least, in the good side. We have Europe in a shallow recession. And it's got some structural problems.

Germany's deindustrializing because of competition from China. You've got India looking pretty good. The stock markets are very, very elevated there, of course. But put it all together, and it looks like the US is going to continue to be an outstanding market, literally outstanding. Standing out from everybody else.

And I think that's a big part of the story for me and why I think the market can continue to move higher.

BRAD SMITH: Are US companies from your purview here, are they well insulated enough then from some of the slowdown that you were mentioning that investors have to also keep tabs on internationally, and, especially, as you noted within China?

ED YARDENI: Yeah. That's a good point. The good news for us, in terms of a slower global economy, is it keeps commodity prices down. It keeps the price of oil down. It keeps inflation down.

The bad news is that for our exports, the markets aren't going to grow as rapidly. But I think the US economy is showing enough strength that the domestic economy will provide some offset to weakness in the global economy. It's not as though the global economy is not going to grow. It's going to grow. And maybe the areas of growth like India, maybe Brazil, Indonesia, some other emerging economies will show more growth while China stalls out here for a while.

BRAD SMITH: Yeah. That's certainly going to be interesting to see how it plays out, especially we think about companies like Nike, companies like Starbucks, Apple, even. We're going to keep close tabs on that greater China and Asia-Pacific build out that they have as well.

And we got to leave things there on the day. We got to have you back and continue this conversation for sure. Ed Yardeni, thanks so much for joining us.

ED YARDENI: Thank you.