Michael Burry warns of a US stock market crash worse than the dot-com bubble due to AI sector overheating
Renowned financier Michael Burry, famous for predicting the 2008 mortgage crisis, has warned that the US stock market may face a downturn more severe than the dot-com crash. He attributes this risk primarily to the overheated valuations in the artificial intelligence (AI) sector.
Source Economic Times
Burry highlights that the valuations of AI companies are driven more by expectations than actual earnings, creating a potential bubble. Additionally, he points to the dominance of passive investing, which could exacerbate the market decline during times of stress.
According to Burry, there is a high likelihood of a significant market correction in the near future, which will compel investors to reassess their portfolios and adjust to evolving market conditions.
