AI Bubble Could Be Ready to Pop and Jim Cramer May Be the Warning Sign

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

The rising values of artificial intelligence stocks and their outperformance compared to other S&P 500 stocks in 2026 has former hedge fund manager Whitney Tilson sending a bubble warning. Here’s why.

Whitney Tilson Smells a Bubble

Tilson draws a parallel between today’s AI trade and the technology stocks that drove the dot-com bubble to its March 2000 peak.

Here are the top 10 best-performing stocks in the S&P 500, which is tracked by the SPDR S&P 500 ETF Trust (as of 8/14/26), as shared by Charlie Bilello, with their industry and year-to-date gains listed below:

Sandisk Corp: technology hardware, +591.3%

Dell Technologies: technology hardware, +293.5%

Seagate Technology Holdings: technology hardware, +254.4%

Micron Technology: semiconductors, +240.7%

Western Digital Corp: technology hardware, +195.6%

Intel Corp: semiconductors, +177.8%

Marvell Technology: semiconductors, +161.6%

Lumentum Holdings: communications equipment, +151.3%

Hewlett Packard Enterprise Co.: technology hardware, +146.6%

Advanced Micro Devices: semiconductors, +140.2%

Don’t Miss:

All 10 stocks are AI-related names and benefiting from the AI trade, Tilson said in a newsletter Tuesday.

For comparison, Tilson asked AI chatbots about the top-performing stocks during the dot-com bubble. Tilson used March 10, 2000, as that was the day the Nasdaq Composite Index peaked.

“Give me the definitive historical-constituent top 10 S&P 500 stocks with exact December 31, 1999 to March 10, 2000 percentage gains,” Tilson’s prompt reads.

ChatGPT was the only bot to return a close answer. Here are the 10 stocks that fit the criteria:

NetApp

Qualcomm

Analog Devices

Oracle

Lam Research

Teradyne

Applied Materials

Corning

Adobe Systems

Apple

Tilson highlights that all 10 of those stocks at the peak of the Nasdaq index before the dot-com bubble were technology related, “reflecting the Internet craze at the time.”

“It reminds me of what Mark Twain is reputed to have said: ‘History doesn’t repeat itself, but it often rhymes.'”

Jim Cramer’s Bubble Indicator

Another bubble indicator may have to do with television personality Jim Cramer, Tilson wrote recently.

“There’s little doubt in my mind that we’re in a similar AI bubble right now – but I’m much less certain how much further it will inflate and when exactly it will burst,” Tilson said.

Story Continues

The latest indicator for Tilson was when Cramer visited an Idaho construction site for a Micron Technology semiconductor plant.

Cramer said at the time that “Micron’s stock is radically undervalued.”

Tilson said this could put the bubble near its peak.

“This is significant because, for decades, Cramer has been a great contra-indicator.”

Tilson highlighted a speech of the “Winners of the New World” from Cramer on Feb. 29, 2000 when he named 10 internet-related stocks.

“I wouldn’t own any other stocks in the year 2000,” Cramer said at the time.

Tilson said that 15 months after Cramer’s speech, the 10 stocks had lost over 80% of their value. Nine years later, the 10 companies were all either bankrupt, delisted, or acquired at a lower price than their pre-bubble valuation.

“I think history is likely to repeat itself with the AI bubble.”

Image via Shutterstock

Read Next:

Building Wealth Across More Than Just the Market

Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That’s why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn’t tied to the fortunes of just one company or industry.

Arrived

Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.

Frontieras

As electricity demand accelerates alongside AI and domestic energy production becomes a growing priority, Frontieras is developing patented technology that converts coal into fuels, chemicals, and low-emission energy products without combustion . Through its Regulation A offering, investors can gain exposure to an emerging energy infrastructure company focused on modernizing American industrial and power resources.

FarmTogether

Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000 — fully managed, with no landlord headaches.

Fundrise

Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estate and credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth.

Qnetic

As electricity demand rises alongside AI, data centers, and renewable energy, long-duration energy storage is becoming increasingly important. Qnetic is developing a kinetic energy storage system designed to provide long-lasting, chemical-free electricity storage , offering investors exposure to the infrastructure supporting a more resilient and reliable power grid.

EquityMultiple

For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000 , with only ~5% of opportunities passing their due diligence process.

Tags: