Two prominent voices on Wall Street are warning that the run-up in AI-related stocks looks like a classic bubble — and that a painful reckoning may be coming.
According to TheStreet, a co-founder of the asset manager GMO Investments is warning of an "epic" stock market crash. The firm's co-founder built his reputation as one of Wall Street's best-known bubble watchers, with what the report describes as prescient calls ahead of Japan's 1989 crash and the 2000 dot-com bust.
Separately, the investment firm GQG argues the warning signs are still flashing. In an interview highlighted by Morningstar, GQG said markets are "still very much" in an AI stock market bubble — language that suggests the firm sees the froth as ongoing rather than already deflated.
The two warnings rhyme in a notable way. Bubble watchers tend to look for moments when investor enthusiasm for a single theme — here, artificial intelligence — pushes prices far above what underlying earnings can justify. Comparisons to the dot-com era are pointed: in 2000, excitement about the internet was real and durable, but many of the stocks riding that excitement still collapsed.
It's worth stressing the limits of these claims. Neither source pins down a date, a trigger, or a specific size for any decline. Bubble calls are notoriously hard to time, and being early can look the same as being wrong for months or years. These are the views of particular firms and investors, not a market consensus.
Still, the warnings carry weight because of who is making them and because AI names now sit at the heart of major stock indexes. When the companies driving so much of the market's gains are the same ones being flagged as overvalued, a sharp correction in AI stocks could ripple far beyond tech.
Why it matters: AI-linked shares have become a load-bearing pillar of the broader market, so warnings from veteran bubble watchers are a signal for ordinary investors to understand how much of their portfolio is riding on a single, much-hyped bet.