Economic commentator Scott Galloway warns that the U.S. stock market could crash within the next 24 months due to overinvestment in AI.
Renowned economic commentator and professor, Scott Galloway (Prof G), has reiterated his warning that the U.S. stock market could face a crash within the next 12 to 24 months due to overinvestment in the field of artificial intelligence (AI). He believes that approximately 40% of the S&P 500's constituent stocks are linked to AI-related businesses, yet the valuations of these companies are difficult to rationalize. Galloway also mentioned that if the GDP growth, primarily driven by AI over the past two years, slows down, the U.S. economy would immediately enter a recession. He advises investors to re-evaluate their risk exposure, pointing out that AI sector valuations may not align with future returns and might require a 50% to 70% reduction in the valuations of related companies.
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