Retail Investors Buy as AI Bubble Warnings Grow
Ray Dalio and strategist Joachim Klement raised bubble concerns, while Bank of America reported renewed buying by retail clients.
Key takeaways
- Ray Dalio said the market was close to bubble territory.
- Joachim Klement expects an AI bubble to burst in 2027 or 2028.
- Bank of America said retail clients were net buyers for the first time since late July.
Warnings about a possible AI bubble are growing, but retail investors are still buying. Bank of America said retail clients were net buyers, marking their first inflows since late July.
Ray Dalio of Bridgewater Associates said the market was “close to that” level when discussing a potential AI bubble. He also pointed to billionaires taking profits and selling as something investors could watch.
Joachim Klement, head market strategist at Panmure Liberum, told Bloomberg that he expects the AI bubble to burst in 2027 or 2028. In September, he had projected the S&P 500 would reach 8,300 by the end of 2027.
Klement said high debt and inflation could weaken hyperscalers’ free cash flow and trigger an AI market collapse. The source noted that his view differs from those of many Wall Street peers.
A Google Trends measure of searches for “stock market bubble” fell to 14 on Thursday, after reaching 100 in early June. The index is relative, and the source described the measure as a rough gauge of market anxiety.
This article was produced with the help of AI technology. Source: Yahoo Finance
