Will Nvidia Follow Amazon's Dot-Com Path? Jeremy Grantham Warns Of Brutal Tech Stock Reversal
Billionaire investor and GMO co-founder Jeremy Grantham has issued a stark warning to artificial intelligence (AI) enthusiasts. He pointed out the historical precedents, recalling how Amazon.com Inc. (NASDAQ: AMZN ) stock plunged “92%” following the 2000 dot-com crash, warning that today’s high-flying AI giants like Nvidia Corp. (NASDAQ: NVDA ) may be on track to face a similar “temporary collapse.” The Danger Of Tech Euphoria While acknowledging that artificial intelligence is a “dazzlingly important idea” that will fundamentally change human life, Grantham argued that the technology is repeating a historical pattern of speculative excess. Major inventions, including railroads and the early internet, have always triggered immense psychological hype, leading to severely overvalued markets. “We all want to put our money in it… and it suck...
Billionaire investor and GMO co-founder Jeremy Grantham has issued a stark warning to artificial intelligence (AI) enthusiasts. com Inc. (NASDAQ: AMZN ) stock plunged “92%” following the 2000 dot-com crash, warning that today’s high-flying AI giants like Nvidia Corp. ” The Danger Of Tech Euphoria While acknowledging that artificial intelligence is a “dazzlingly important idea” that will fundamentally change human life, Grantham argued that the technology is repeating a historical pattern of speculative excess.
Major inventions, including railroads and the early internet, have always triggered immense psychological hype, leading to severely overvalued markets. “We all want to put our money in it… and it sucks in more than you can shake a stick at and you get overinvestment,” Grantham told CNBC. ” Surviving The Tech Crash To illustrate his point, Grantham urged investors to look back at the tech bust of 2000 as a blueprint for the current AI cycle, highlighting the extreme volatility of early market leaders. “Amazon in 2000 came down 92%,” Grantham stated.
” Though Grantham admits AI will ultimately rewrite the rules of global productivity, he maintains that the immediate future will see severe pain for investors before sustainable winners emerge. Read Also: After The June Swoon, Could July Deliver A Breakout Rally? S. ” The veteran market strategist, renowned for accurately calling major asset bubbles, predicted that a painful reversion to historical trends is inevitable.
According to Grantham, the broader market is poised to peak out and drop back sharply. “Getting back to trend from here is closer to a 70% decline than a 50%,” Grantham warned, emphasizing that while the exact timing remains highly uncertain, a massive correction is in order. How Have Markets Performed In 2026? 23% year-to-date.
22% YTD. The SPDR S&P 500 ETF Trust (NYSE: SPY ) and Invesco QQQ Trust ETF (NASDAQ: QQQ ), which track the S&P 500 and Nasdaq 100, respectively, closed lower on Friday. 52. 29% lower on Friday.
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