{"id":226249,"date":"2026-01-07T23:47:08","date_gmt":"2026-01-07T23:47:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/226249\/"},"modified":"2026-01-07T23:47:08","modified_gmt":"2026-01-07T23:47:08","slug":"terrified-investors-are-bracing-for-an-ai-bubble-reckoning","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/226249\/","title":{"rendered":"Terrified Investors Are Bracing for an AI Bubble “Reckoning”"},"content":{"rendered":"

Fears over a growing AI bubble that could wipe out the entire economy<\/a> if it were to burst continue to mount. <\/p>\n

For many months now, investors and even tech leaders have openly been discussing the possibility \u2014 but if or when such a collapse could take place remains a subject of heated debate.<\/p>\n

Nonetheless, investors are already preparing for that type of major tech sell-off, the Financial Times reports<\/a>. The reporting shows that plenty of fear and uncertainty remain over the untold billions of dollars being poured into wildly unprofitable AI ventures \u2014 a dynamic that\u2019s seen AI companies\u2019 valuations skyrocket to record heights, despite dubious prospects of ever turning a profit<\/a>.<\/p>\n

Some are pulling back on their investments in major tech stocks, while others are outright betting on eventual drops in share prices.<\/p>\n

\u201cWhether there are excesses\u2026 in the equity market on AI is no longer questionable, but to figure out which exact companies will be the losers and when this reckoning will happen is difficult,\u201d fund management firm Amundi chief investment officer Vincent Mortier told the FT.<\/p>\n

One investment fund, Blue Whale Growth, sold its Microsoft and Meta stock in the second quarter of last year, with chief investment officer Stephen Yiu telling the newspaper that \u201cwe are concerned about the return on investment in some cases, while some of the valuations are insane \u2014 especially in private markets.\u201d<\/p>\n

GQG Partners chair Rajiv Jain added that \u201cAI\u2019s massive cash burn remains elevated with very little profitability in sight.\u201d His fund sold all of its Magnificent Seven \u2014 investor shorthand for Alphabet, Amazon, Apple, Tesla, Meta Platforms, Microsoft, and Nvidia \u2014 holdings.<\/p>\n

\u201cThough we had less exposure to a few Mag 7 names throughout 2025, we exited our remaining positions by early November because the risks of an AI bubble blow-up are growing, in our view,\u201d he said.<\/p>\n

At the same time, many remain unafraid of an imminent collapse.<\/p>\n

\u201cWe don\u2019t believe that we are in a bubble,\u201d BlackRock international chief investment officer Helen Jewell told the FT, \u201cbut investors should prepare for a bumpy ride in 2026.\u201d<\/p>\n

Despite plenty of concerns among investors, banks remain optimistic about future growth. Wall Street has predicted double-digit gains this year. The S&P 500 has surged a whopping 92 percent<\/a> since October 2022, posting double-digit returns for three years in a row now.<\/p>\n

\u201c2026 should be another strong year for AI stocks, with capex likely to surpass expectations,\u201d JPMorgan\u2019s Dubravko Lakos-Bujas wrote<\/a> in a memo.<\/p>\n

Others are far more muted about the outlook. Three years on from OpenAI\u2019s launch of ChatGPT, some are starting to wonder<\/a> how long the enormous hype surrounding AI can continue to be sustained.<\/p>\n

In a 2025 retrospective posted on Monday, Bridgewater hedge fund founder Ray Dalio warned that the tech market is \u201cnow in the early stages of a bubble.\u201d<\/p>\n

But a crash, some argue, may still be some ways away thanks to plenty of remaining excitement.<\/p>\n

\u201cA bubble likely crashes on a bear market,\u201d Cetera Financial Group chief investment officer Gene Goldman told Bloomberg<\/a>. \u201cWe just don\u2019t see a bear market anytime soon.\u201d<\/p>\n

More on the AI bubble: AI Investors Furious at Suggestion That There\u2019s an AI Bubble<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Fears over a growing AI bubble that could wipe out the entire economy if it were to burst…\n","protected":false},"author":2,"featured_media":226250,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,343,344,85,46,125],"class_list":{"0":"post-226249","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-il","12":"tag-israel","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/226249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=226249"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/226249\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/226250"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=226249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=226249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=226249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}