#market-valuations

#market-valuations

Tech analyst and professor Scott Galloway has issued a stark warning regarding the highly inflated valuations of the Magnificent 10 mega-cap companies, asserting a financial collapse at generative AI leader OpenAI would trigger a systemic shock leaving "nowhere to hide" for investors across the global markets. Galloway, speaking on his Prof G Markets podcast, characterized the current market reliance on AI as precarious, noting AI has been responsible for 80% of the stock market returns since the launch of ChatGPT in late 2022.

Legendary investor Warren Buffett has been steadily unloading stocks at Berkshire Hathaway )( ) while amassing a massive cash reserve, sparking questions about a potential market crash. If the Oracle of Omaha is selling and stashing cash, should we be buying? In the third quarter, Berkshire's cash holdings ballooned to a record $381.7 billion, even as U.S. markets hit new highs. This cautious stance comes as Buffett, now 95, prepares to step down as CEO at year's end, handing the reins to Greg Abel.

Markets often rally in anticipation of rate cuts but then decline when the actual rate cuts are implemented. J.P. Morgan's trading desk recently warned that despite stocks setting "more than 20 all-time highs this year," the Federal Reserve's next rate cut "threatens to curb investors' zeal" through a potential "sell the news" drop. The S&P 500 is up almost 33% from its lows in April and is up nearly 13% for 2025.