Risks surrounding investments in artificial intelligence are increasing!
In his view, this could lead to a significant downturn in global stock markets.
Strategist at Panmure Liberum, Joachim Klement , believes that excessively inflated valuations in the artificial intelligence sector could lead to a sharp decline in 2027 or 2028. In his view, this could trigger a significant downturn in global stock markets.
Klement forecasts that the S&P 500 could fall to 5,000 points by the end of 2027, representing a decline of approximately 36% from current levels. His forecast is the most pessimistic among the strategists tracked by Bloomberg . Other strategists, on average, expect the index to gain 14%.
Klement also expects Europe’s Stoxx 600 index to fall to 430 points. He says investors are overly focused on the strong earnings of technology companies while overlooking other risks in the market.
According to Klement, high interest rates, rising borrowing costs and declining free cash flows could further worsen the situation. He urged investors to prepare for a potential market downturn and have contingency plans in place.