Strategas chief market strategist Chris Verrone is telling investors to “raise your odds of some type of a melt-up” through the back half of 2026.

Verrone made the call on the Real Eisman Playbook podcast, citing parallels to the 1999 tech rally and the velocity of the bounce off the late-March lows.

Host Steve Eisman pushed back.

“The war could end tomorrow. The financial event is not ending tomorrow,” the “Big Short” investor said, pointing to software credit exposure at Apollo Global Management (NYSE:APO), Blackstone (NYSE:BX), and KKR (NYSE:KKR).

Semis Now 17% Of The S&P 500

Strategas chartist Todd Sohn said semiconductor stocks now make up roughly 17% of the S&P 500 (NYSE:SPY), up from 2% a decade ago and close to half of the broader info tech weighting.

“Is it aggressive perhaps? Is it warranted though? Yes,” Sohn said. “We’re in a semiconductor world now.”

Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) anchor the concentration, while Micron Technology (NASDAQ:MU) is now larger by market cap than Johnson & Johnson (NYSE:JNJ).

AI infrastructure plays are still leading the rally, including GE Vernova (NYSE:GEV), which Sohn said is now larger than GE Aerospace (NYSE:GE).

The bull case has a catch: The S&P is now a leveraged bet on AI capex.

Semis at 17% plus the hyperscalers means a meaningful chunk of the index is riding on data center buildout assumptions, and Sohn said there is nowhere obvious to rotate if the trade breaks.

What Prediction Markets Are Pricing

Even with reports that the U.S.-Iran ceasefire has effectively collapsed and oil back above $100 a barrel, Kalshi traders have not pushed recession odds back to the war highs. The 2026 recession contract sits near 24 cents, well below the 37-cent peak from the end of March.

Polymarket gives a 20% probability to an “AI bubble burst” by Dec. 31, 2026.

Verrone said it is “hard to make recession your base case” when transports including CSX (NASDAQ:CSX) are making new highs.

The Software Wrinkle

Eisman’s worry is software, and it is not new. The “Big Short” investor has argued that AI will trigger the next credit crisis in software, with private credit lenders sitting on top of leveraged loans to companies whose moats are eroding.

Last week reinforced the thesis. ServiceNow (NYSE:NOW) dropped 14% despite reporting 22% revenue growth. Eisman said the cycle has not yet shown up in bank data, but if it shows up anywhere first, it shows up at the alts.

Verrone’s takeaway: lean into the melt-up but rotate some capital into energy, materials, and natural resources to play defense.

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