New warning on AI stock crash. Ray Dalio sounds the alarm on stocks. Bessent & Warsh are laying the foundation for a major liquidity shock in America.

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AI Bubble Risks Worst S&P 500 Crash Since 2008, Strategist Says

(Bloomberg) — The head of market strategy at a London investment bank has a stark warning for investors: the artificial-intelligence trade may soon be over in what could trigger the most severe market crash since the global financial crisis.

Equities have powered to record levels across the globe this year, fueled in part by optimism over surging spending on AI infrastructure. But Panmure Liberum’s Joachim Klement said his base case is for that trade to disintegrate as soon as 2027, sending stocks sharply lower.

“My core conviction is that the AI bubble will either burst in 2027 or in 2028, so sometime in the next two years,” Klement said in an interview. Hyperscalers’ free cash flows are largely depleted, while the cost of debt is rising quickly and becoming prohibitive for these firms, he said.

Dalio Says We’re Nearing Point Where AI Bubble May Burst

(Bloomberg) — Billionaire Ray Dalio warned that artificial intelligence is a “classic bubble” that is nearing a bursting point thanks to rising interest rates and the need to turn wealth into cash.

Speaking at the Forbes Global CEO Conference in Singapore on Wednesday, Dalio said that a huge amount of debt is being taken out to fund AI. As rates continue to climb, that is a point at which the bubble begins to pop.

“We’re in the part of the cycle that is before that but approaching that,” the Bridgewater founder said. “I think we’re close to that.”

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