Stock market is now in a wave of forced optimism, sponsored by the creators of artificial intelligence. Huge investments in the field resulted in record growth, but the bull market is quickly approaching the abyss.
Anyway, AI boom more and more resembles a financial bubble, the bubble, which could burst as early as 2027 or 2028, paving the way for a major stock market crash (in case anyone has forgotten the global financial crisis of 2008).
Problem numero One
To keep up with the demands of AI hyperscalers are pouring huge amounts of money into infrastructure, projected to hit $713 billion in 2026.
So, unless profits grow manifold to compensate for the enormous costs, or Blackrock with Vanguard and Street won't invest 401Ks in the field, AI will suffer market reality check.
Wall Street Blindness Issues
Despite obvious problems with profitability, namely its absence, the stock market continues to set new records in 2026. We see it this way: investors are being fed mass nonsense from every possible media sources:
Market is ignoring credit issues, macroeconomic weak reports, because quarterly earnings for big tech companies remain strong.
Investors are treating AI as immune to interest rate hikes and debt costs, assuming tech profits will endlessly bail out the broader market.
It doesn't mean you need to panic sell your portfolios right now, but it's better to start reevaluating it. Monitor S&P 500 (200MA, if price starting to fall below it, it’s a sign) AI capex and costs (credit), if they start to fall that is a sing as well, if these go bad, you can turn to food producing companies (there is always demand on it, no matter what kind of crisis is happening), tobacco, big pharma, you get the idea.
While Wall Street's outlook remains optimistic, it's worth noting that market valuations are based entirely on a single scenario, and if anything goes wrong, it could lead to massive market crashes.
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