Several prominent investors and strategists warn that enthusiasm for artificial intelligence may have created a stock market bubble, though they disagree about when it could burst and whether investors should still participate. Ray Dalio says rising borrowing costs and investors selling assets to realize gains could trigger a correction. Nassim Taleb points to fragile bond markets and the risk that domestic investors may reduce purchases of U.S. Treasuries. He cautions that expensive markets can keep rising and recommends thinking in terms of increased risk, rather than predicting a crash. Michael Novogratz calls AI the biggest bubble of his lifetime but says investors should ride the rally, arguing that political competition with China will make governments reluctant to slow AI development.

Panmure Liberum strategist Joachim Klement expects the bubble to burst in 2027 or 2028, potentially causing the steepest market decline since the global financial crisis. He cites rising debt costs and heavy data center spending, and advises investors to prepare for a downturn. Bank of America’s Savita Subramanian says bonds now offer serious competition to stocks, while unusually optimistic expectations increase the chance of disappointment. PIMCO warns that 10-year U.S. Treasury yields could reach 6%, a level that could weaken stocks, corporate debt, private markets and commercial real estate.

(pb.pl)