Billionaire investor Mike Novogratz says the stock market is entering a dangerous phase as artificial intelligence lifts valuations, even as risks build.
In a new Bloomberg interview, the billionaire warns that the stock market may be on the last legs of its bull cycle amid investor overexuberance.
“We are in a euphoric moment in stocks, and there is a lot of excitement all around this AI theme. AI is powerful. It is going to change the way we do things. I was literally just in a meeting with my management team, talking about AI and Galaxy. And every single C-suite in the world is having that same conversation. And so that creates bubble-like excitement.”
Novogratz says stretched valuations are beginning to worry him, with the Nasdaq and S&P trading at levels that appear disconnected from fundamentals.
“And we’ve got valuations in the Nasdaq and the S&P as high as we see them. And so it’s a really hard market because it’s got huge momentum and excitement around a real story, but it’s got valuations that get you really nervous. And the interconnectivity of NVIDIA, OpenAI, Oracle, the vendor financing, web, that gets you nervous, like valuation creating more valuation.
And so I think you’ve got a market that’s nervous, that doesn’t mean it’s not gonna go a lot higher, right? The last leg of great bull markets always surprises people on how powerful it can be. And I’m not saying this is the last leg, but it very well could be.”
The comments arrive as OpenAI, in partnership with Oracle and SoftBank, announced five new US data center sites under its Stargate platform. The buildout brings Stargate to nearly seven gigawatts of planned capacity and over $400 billion in investment through 2028, putting the group on track to reach its full $500 billion commitment by the end of 2025.
Says OpenAI CEO Sam Altman,
“AI can only fulfill its promise if we build the compute to power it. That compute is the key to ensuring everyone can benefit from AI and to unlocking future breakthroughs. We’re already making historic progress toward that goal through Stargate and moving quickly not just to meet its initial commitment, but to lay the foundation for what comes next.”
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