Countdown to the AI Bull Market? Wall Street Tech Veteran: This Year Is Like 1997/98, Next Year Could Drop 30-50%
"AI Bull Market Countdown? Wall Street Veteran: This Year Feels Like 1997/98, Next Year Could Drop 30-50%"
In an interview, veteran tech analyst Dan Niles draws parallels between the current AI boom and the 1997-98 period of the internet boom, suggesting the bull run isn't over yet. The core new driver is identified as "Agentic AI," which performs multi-step tasks and consumes vastly more computing power than conversational AI. This shift is expected to boost demand for cloud infrastructure and benefit CPU makers like Intel and AMD, potentially pressuring GPU leader Nvidia.
However, Niles warns of significant short-term overbought conditions in semiconductors. His central warning is for a potential major market correction of 30-50% starting in early 2027. Drivers include a slowdown from high growth comparables, the outsized capital demands of companies like OpenAI, and a wave of massive tech IPOs sucking liquidity from the market.
A J.P. Morgan survey of 56 global investors aligns with this view, finding that 54% expect a >30% U.S. stock correction by 2027. Among mega-cap tech, Niles favors Google due to its full-stack AI capabilities and cash flow, expresses concern about Meta's user growth, and sees potential for Apple's AI Siri and foldable iPhone.
Niles advises investors to be nimble, hold significant cash, and closely monitor the conflicting signals from equities, oil prices, and bond yields, which he believes cannot all be correct simultaneously.
marsbit05/13 08:33
