While there’s plenty of skepticism about artificial intelligence, the chief economist at Apollo Global Management is warning that the technology is so overblown it risks crashing the market worse than the dot-com bubble burst of 1999.
While the S&P has hit new records recently and is currently near an all-time high, Sløk argues the performance boost is due to the rise of the Top 10 stocks. Investors, he worries, are buying the hype and paying prices as if the promises and boasts of these firms (such as trillion-dollar savings and world-changing breakthroughs) are a certainty. The 1990s were a lesson that not every promise would or could become reality.
And even though many of those top companies are profitable, compared to the losses of many dot-com darlings, the fundamentals don’t justify the multiples.
Sløk has sounded other warnings about the economy. In June, he said he believed the U.S. was at a critical inflection point for stagflation, where the economy continues to grow, but inflation remains high. He blamed tariffs for that possibility.
