Liberation Day and tariff fears are a distant memory for traders.

Wall Street is once again exceedingly optimistic, giddy about the potential for artificial intelligence to boost Nvidia, Broadcom, Meta, Alphabet, Amazon and other tech stocks further and help lift earnings for a broader set of companies that may benefit from more efficiencies and higher profits thanks to AI.

The Magnificent Seven stocks are now worth nearly $20 trillion, an all-time high. And the Magnificent Seven plus Broadcom and Oracle (the Fine Nine? Cloud Nine?) account for more than 40% of the S&P 500's market value, according to Dow Jones Market Data. So they have a huge sway on the broader market.

Add in the enthusiasm about expected interest rate cuts from the Federal Reserve as well as fiscal stimulus from Washington, and it's easy to see why several strategists are lifting their targets for the S&P 500. To quote the band Rage Against the Machine -- which band members would probably hate in a story about stocks -- it is a case of bulls on parade.

According to FactSet, the consensus target for the S&P 500 over the next 12 months is a shade below 7245. That's up from a target of about 6600 in May and 10% higher than current levels. Much of the enthusiasm is driven by AI.

"Yes, there is froth, but as long as AI capex remains intact, the bull market should continue," said strategists at Wells Fargo Securities in a report Tuesday, adding that "the AI investment cycle could be as big as the internet cycle, if not bigger, requiring much more compute power than past cycles of innovation."

To that end, the Wells Fargo strategists think the S&P 500 could hit 7200 by the end of 2026.

And it's all about earnings and the concentration of the tech sector/AI trade. Jonathan Golub and Patrick Palfrey, strategists at Seaport Securities, noted in a report Wednesday that tech sector profits are expected to grow 24% this year and another 17% in 2026. So they think the market's returns are "driven by superior earnings, not animal spirits."

Strategists at Goldman Sachs are bullish too. They're not using the B-word to describe the current market environment, pointing out in a report that even though the valuations of the largest tech stocks are "modestly above" historical averages, they "remain well below the levels reached in the Tech Bubble."

Along those lines, the Nasdaq-100 is currently trading at about 31 times forward earnings estimates, compared to a P/E of 60 back in February 2000.

Betting on AI to power the market even higher is an increasingly popular view for U.S. and global investors too. Despite concerns earlier this year that the U.S. economy might lose steam due to the effects of inflation and higher interest rates, AI and Big Tech continue to prop up the market.

"It feels like the U.S. continues to defy the odds," said Ray Vars, a partner with Harding Loevner, a global money manager, in an interview with Barron's. "But a lot of it is one area. Anything AI-related is powering this growth. We continue to see demand. More broadly, we're not seeing that same evidence of strength beyond tech."

Vars said his firm is playing the tech/AI trend internationally, with investments in Taiwan Semiconductor, Dutch chip equipment supplier ASML Holding and Japanese tech firms Disco and Daifuku.

Still, some are concerned that the market rally has come too far too fast. Expectations are high. Companies will have a lot to live up to.

"Much of the margin-boosting hope from AI needs to come to fruition to justify current valuations," said analysts at Ned Davis Research in a recent report.

That may be true. But as long as the market remains so heavily concentrated in just two handfuls of stocks, investors may be just fine even if the long-awaited broadening of the rally doesn't materialize.

"Tech may not collapse but just move sideways," said Mark Hackett, chief market strategist with Nationwide, in an interview with Barron's. "We're not seeing everyone all-in yet. Sentiment is still not that frothy."

In other words, it looks like the AI-induced market boom has a little more room to run.