The AI bubble is not expected to have a cataclysmic collapse in 2026, but some AI companies may retrace due to increased focus on fundamentals, potentially dragging down broader markets (S&P).
"I don't think we're going to have a cataclysmic bubble collapse in terms of AI next year. Although I do think that there's going to be more focus on these circular financing deals. There's going to be more focus on fundamentals, actual cash flows, and as a result, we could start seeing some of these AI companies retracing, which because they are such a big component of the S&P, will drag the broader markets down with it."