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Major technology companies have pledged billions in spending on artificial intelligence infrastructure and data centers in recent months, driving the surge in AI stocks and boosting valuations. However, some analysts warn that this cycle of AI-related capital spending could wind down, potentially signaling the end of the current bull market.

Ed Clissold, the chief U.S. strategist at Ned Davis Research, told CNBC recently that tech companies spending new capital in AI is a “classic” example of a capex cycle. The analyst warned that most of these cycles don’t end well.

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“This is a classic capex cycle and most of these capex cycles end poorly with a bear market, in some cases a recession,” Clissold said. “If the rest of the economy isn’t doing well enough, that could be the case.”

However, Clissold told CNBC that the current market rally is expected to continue for now amid positive trends. He said most stocks are above their 50-day and 200-day moving averages, and a majority of smaller groups within sectors are trending higher. Clissold expects the market to remain in the green in the fourth quarter, but advised caution down the road.

“So the message for now is positive, but of course we have to keep in mind that good news doesn’t go on forever and we need to keep an eye on what’s going on in the AI universe,” he said.

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Clissold said mega-cap technology companies have strong cash reserves and spending power, which could allow the AI-led rally to last much longer than previous “bubble cycles.” He believes there’s “always a bull market somewhere,” and investors can find opportunities in other sectors if a broader market rotation away from AI stocks starts.

“Even in 2000, from the March 2000 high to the October 2002 low, the Russell 2000 Value Index was down 5%, while the S&P was down almost 50%,” Clissold told CNBC. “So once the rotation happens out of these names, there will probably be other places in the market for investors to focus on.”