"Whether there are excesses... 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,"
"we are concerned about the return on investment in some cases, while some of the valuations are insane - especially in private markets."
"AI's massive cash burn remains elevated with very little profitability in sight."
"Though 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,"
Rapid inflows into unprofitable AI ventures have driven company valuations to record highs, prompting fears of an AI bubble that could trigger a broad market sell-off and economic harm. Some investors and funds are reducing exposure to major tech stocks, selling holdings in Microsoft, Meta, and the broader Magnificent Seven, and placing bets on falling share prices. Concerns focus on excessive private-market valuations, elevated cash burn across AI projects, and uncertain timelines to profitability. Other market participants remain unconcerned about an imminent collapse, producing divergent positioning and continued uncertainty over timing and specific losers.
Read at Futurism
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