Investors fear Time just jinxed the AI stock-market rally with its 2025 person of the year

By Joseph Adinolfi

Will the so-called magazine-cover curse strike again?

Will the “magazine-cover curse” now come for the AI trade? Pictured: alternate covers of Time magazine’s person-of-the-year issue.

Over the past month or so, shares of companies focused on the artificial-intelligence boom have faced a steady drumbeat of fear, uncertainty and doubt. On Thursday, investors found one more thing to worry about: a potential magazine-cover curse.

Before the opening bell rang out on Wall Street, Time magazine announced its selection for person of the year. For 2025, it awarded the honor to a group of people, as it sometimes does: “The Architects of AI.”

A cover photo included a group of key AI chief executives. The honorees included:

— Mark Zuckerberg, CEO of Meta Platforms Inc. META

— Lisa Su, CEO of Advanced Micro Devices Inc. AMD

— Elon Musk, founder of xAI, in addition to his roles at Tesla and SpaceX, among others

— Jensen Huang, CEO of Nvidia Corp. NVDA

— Sam Altman, CEO of OpenAI

— Demis Hassabis, CEO of Alphabet Inc.’s GOOG GOOGL DeepMind

— Dario Amodei, CEO of Anthropic

— Fei-Fei Li of the Stanford AI Institute

The timing of the cover’s release wasn’t ideal. Oracle Corp. shares (ORCL) tumbled almost 11% on Thursday after its latest earnings report left investors disappointed. Shares of other AI companies were dragged lower in sympathy. As of Thursday’s close, the tech-heavy Nasdaq Composite COMP remained below the record levels of October following a selloff last month that saw the index snap a seven-month winning streak.

See: Oracle drags down Nvidia and other AI stocks as bubble fears intensify

The blue-chip Dow industrials DJIA and the stock-market benchmark S&P 500 SPX, meanwhile, registered all-time-high closes.

Now some people are wondering whether it might be time to sell shares of these AI-oriented companies – or even to bet against them. Jim Bianco, president of Bianco Research, asked exactly that in a post on X, where he pointed out that Time’s person of the year has “a long history of being an excellent contrarian indicator.”

Brent Donnelly, president of Spectra Markets, crunched the numbers, and found that the person-of-the-year track record as a counterindicator is actually quite remarkable. Although the sample size is small, by Donnelly’s count – there have only been nine instances so far, including this year’s, in which the Time cover represented an investable person, company or category – it has been surprisingly effective.

Investments, whether in companies or trends, tied to a person-of-the-year pick were higher one year later just 13% of the time, according to Donnelly. After two years, that figure rose to 25%.

The only example that didn’t sell off during the following year was Intel Corp., whose co-founder and then-CEO Andy Grove was tapped as 1997’s person of the year. Intel shares (INTC) were hammered a few years later, when the dot-com bubble burst.

“It’s definitely an eyebrow raiser,” Donnelly told MarketWatch. “It’s another piece of the puzzle that tells you the AI theme is common knowledge, and thus it’s hard to understand how there could be alpha remaining in something like [a] long [position in] Nvidia.”

He shared his data with MarketWatch, which is presented in the table below:

Investment Performance after Time Person of the Year Features a Corporate Leader or Specific Industry
Year Person of the year Company Stock-price change (year of cover) Stock-price change (year after cover) Stock-price change (2 years after cover)
1928 Walter Chrysler Chrysler 127.60% -49.20% -58.30%
1929 Owen D. Young RCA -32.30% -59.10% -81.80%
1955 Harlow Curtice General Motors Co. 41.60% -3.80% -21.10%
1982 The Computer IBM Corp. 61.50% -4.10% -20.10%
1991 Ted Turner Turner Broadcasting System Inc. 70.90% -7.60% 17.80%
1997 Andrew Grove Intel Corp. 7.00% 68.80% 134.40%
1999 Jeff Bezos Amazon.com Inc. 35.20% -85.80% -75.20%
2021 Elon Musk Tesla Inc. 40.40% -65.00% -29.50%
2025 The AI Architects Nvidia Corp., Tesla, Meta Platforms Inc., Advanced Micro Devices Inc., Alphabet Inc. ? ? ?
Average 44.00% -25.70% -16.70%
Median 40.40% -7.60% -21.10%
% Up 88% 13% 25%
Source: Spectra Markets

Ed Yardeni, president of Yardeni Research, told MarketWatch he felt the “magazine-cover curse” could strike once again. “Definitely a potential curse,” he said.

Later, Yardeni elaborated on why his feelings about tech stocks had recently changed. Earlier this week, he dropped his portfolio recommendation to overweight exposure to tech and communication-services-sector stocks after 15 years. The two sectors are heavily exposed to AI.

The latest AI models released by Google last month appeared to spark a split in the trade, as shares of stocks associated with “Team Google” – including its parent company, Alphabet, and business partner Broadcom Inc. (AVGO) – soared, while stocks linked to “Team OpenAI” struggled. The latter group included Nvidia and Microsoft Corp. (MSFT).

“The AI trade is turning into a ‘Game of Thrones.’ In the past, the Magnificent Seven had their own kingdoms surrounded by big moats. They each had their unique monopolies. But now they are competing with one another in the AI race, threatening one another’s kingdoms,” Yardeni said in written commentary.

What is the ‘cover indicator’?

Pioneered by analyst Paul Macrae Montgomery in his newsletter “Universal Economics,” the Time Magazine Cover Indicator – also known more generally as the Magazine Cover Indicator – posits that if a popular investment theme makes it to the cover of a general-interest publication like Time magazine, then the end is probably near.

Montgomery died more than a decade ago, and print magazines have been struggling to maintain audiences for years. While copies of his original work are difficult to find, his conclusions have been preserved by people like Ritholtz Wealth Management co-founder Barry Ritholtz, who years ago had several conversations with Montgomery. Ritholtz laid out the three criteria he felt must be met for the indicator to apply.

First, the indicator only works if the cover in question belongs to a mainstream, nonbusiness publication. Second, the concept or theme must be widely known to the broader public. And finally, serious asset-price appreciation must have occurred. At least those were the original rules as laid out by Montgomery.

Ritholtz said this about the logic behind the indicator: By the time an investing trend matters to editors at a major general-interest publication like Time magazine, most of the money already has been made.

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