AI has carried the stock market. An industry pause could pull the rug out, warns this Wall Street giant.

Citigroup is flagging a risk that sits underneath much of this year's equity rally: the market's heavy reliance on artificial intelligence as a growth engine. In the bank's view, if the pace of AI model development were to slow, analysts could begin revising earnings expectations lower — and those upward revisions have been a key driver of stock gains in 2025.

The logic matters because index-level returns have been concentrated in a relatively small group of AI-linked companies. When a narrow set of names supplies most of the upside, the market becomes more sensitive to any change in the narrative supporting them. A pause in model progress would not necessarily mean AI spending stops, but it could prompt investors to question how quickly future profits will arrive.

For observers, the useful signal to watch is earnings revisions themselves — whether analysts keep raising forward estimates for AI-exposed firms or start trimming them. That trend, more than any single product announcement, would show whether the market's AI premium still rests on firm ground.