(Nov 19): Algebris Investments’ founder and chief executive officer warned investors to reduce allocation to the world’s top technology companies, as he made a bearish case for artificial intelligence (AI).
“The likelihood is that we are going to have a significant correction,” Davide Serra said at the Bloomberg New Economy Forum in Singapore.
He said that will be the case if revenues aren’t going to justify the AI revolution, which is “impossible by 2030”, given the level of public debt around the world and how much taxes need to subsequently increase.
The veteran money manager’s comments add to growing uncertainty around how long the bull run in big tech stocks will last and fears of a bubble in AI. Algebris was started by Serra, a former banks analyst, in 2006 and has investments across credit, equity, and private debt. The independent firm runs about EUR 32.2 billion ($48.58 billion), according to a fund factsheet in August.
In other comments, he said the US share of global markets is reaching its mathematical limit.
“Never in history could one third of the economy command 70% of world valuation,” Serra said. “As a result, we are peaking.”
See also: AI stock rally to overcome bubble concerns, Fidelity says
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