AI market crash coming soon? Billionaire investor Paul Tudor Jones says the bulls have another two years

Wall Street and other global markets soared to fresh record highs this week as tech stocks rallied amid enthusiasm over AI. Billionaire American investor Paul Tudor Jones sees more room for the AI-fuelled bull market to run, while warning that the market downturn can be significant once it ends.

Big market crash coming?

Tudor said that markets have completed around 50 to 60% of the AI bull market, which now has another year or two to run. However, this comes with a warning. The market expert highlighted that while AI developments are still in their early stages, the ongoing times feel like the 1999 period – just before the dot-com share prices peaked in early 2000. Jones warned that once this ends, markets can see a strong crash, just like the one seen in the beginning of the century.

“Just imagine the stock market went up another 40%. The stock market GDP is going to probably be good lord 300%, 350%. You just know that there’ll be some … breathtaking kind of corrections,” he told CNBC.

Despite the caution, Jones said that he has made AI investments, without mentioning which AI stocks he purchased or when. “I am a macro trader, so I just buy baskets, and what I would simply say is, it’s a crazy, crazy time…I always love to find historical precedents,” he said. The American investor however highlighted that AI needs regulation by the government, as it can become dangerous to humanity if left unchecked.

Wall Street recorded strong gains earlier this week, with S&P 500 and Nasdaq surging to record highs as strong earnings from Advanced Micro Devices sparked a rally in chipmakers and other AI-related stocks. Japan’s Nikkei meanwhile skyrocketed 6% on Thursday to cross 63,000 for the first time ever. South Korea’s Kospi also hit an all-time high this week as an AI-powered rally in semiconductor stocks drove Samsung Electronics past the $1 trillion market-cap ‌barrier.
Back home, IT stocks saw a significant decline earlier this year as new AI innovations spooked investors about the nascent technology making India’s much-touted IT services companies obsolete. While analysts still argue the strengths and weaknesses of such worries, AI continues to evolve.
(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)