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

Citigroup is flagging a concentration risk that has become central to this year's equity rally: the market's heavy reliance on artificial intelligence. In a note to clients, the bank cautions that if the pace of AI model development slows, companies tied to the theme could see their earnings estimates revised lower. That matters because those upward earnings revisions have been a key driver of stock gains in 2024, not just investor enthusiasm.

The logic is straightforward. When analysts raise profit forecasts, stock prices often follow, since valuations are typically anchored to expected earnings. If AI progress stalls, that revision momentum could fade—and with it, a major source of support for the market's leadership.

For investors, the takeaway is about concentration, not prediction. Watch whether AI-related capital spending and product launches keep meeting expectations, and whether analysts continue lifting estimates. A slowdown in either would test how much of the rally rests on fundamentals versus narrative.