The AI market will not experience a cataclysmic bubble collapse in 2026, but there will be increased scrutiny on fundamentals and cash flows, leading to some AI companies retracing and potentially dragging down broader markets.
"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."