By Emily Forgash | Updated on Oct 07, 2026 at 07:23 PM
The chorus of billionaire investors opining about an artificial-intelligence bubble is expanding, and Michael Novogratz, for one, says the speculative frenzy in technology stocks will keep growing.
AI is in the “biggest bubble of our lifetime,” and investors should jump in, Novogratz said at a conference this week. From investors like Novogratz and billionaire Ray Dalio to analysts at Bank of America Corp., the idea that the AI trade is in bubble territory is gaining traction. The debate now is about whether to ride the wave or flee.
Gains in AI-linked shares helped push the S&P 500 Index to a record high Tuesday, with chip darling Nvidia Corp.’s market value approaching $6 trillion. While the relentless march higher in long-term borrowing costs is clouding the outlook , as Novogratz sees it, such headwinds aren’t enough to derail the bull run.
“Bubbles don’t end like we are today,” the founder and chief executive officer of cryptocurrency conglomerate Galaxy Digital Inc. said on a panel at the Greenwich Economic Forum in Greenwich, Connecticut. “I know how bubbles end, and they end spectacularly, and this isn’t spectacular enough.”
Major technology hyperscalers are projected to spend more than $1 trillion on AI capex next year, with many companies leaning heavily on debt to finance their plans. Questions are swirling over whether they can make enough money to sustain the infrastructure boom, fueling worries around the risk of overheatingin the AI trade.
Market watchers appear split over the consequences of so much money pouring into AI. Some investors are growing uneasy that the aggressive spending and speculative fervor mirror the late 1990s dot-com boom. Others say tech companies have deep pockets and can afford the outlays on AI datacenters, and AI will ultimately lead to unprecedented productivity gains.
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For Novogratz, AI-linked stocks still look cheap on a price-to-earnings basis.
“If you were not invested in AI, you might as well just go home and put your head in a bucket of ice,” he said.
On the other hand, Dalio, the Bridgewater founder, said · at a conference in Singapore on Wednesday that AI is a “classic bubble” that’s nearing a bursting point thanks to rising interest rates and the need to turn wealth into cash.
As rates keep climbing, that’s a point at which the bubble begins to pop, Dalio said.
“We’re in the part of the cycle that is before that but approaching that,” he said. “I think we’re close to that.”
Investors wary of owning tech megacaps can tap equity derivatives both to benefit from the record rally and to protect against the fallout from a potential bubble, Bank of America strategists wrote in a note on Tuesday.
Nvidia’s price-to-earnings multiple, which is near the lowest level since 2016, and projected 70% earnings growth for next year demonstrate that AI-driven technology stocks remain far from bubble territory, DBS Group Chief Investment Officer Hou Wey Fook said.
“If I describe the poster child of AI trading at mid-teens, how can it be a bubble?” he said in a Bloomberg TV interview.
The threat of regulation is making some worried about AI’s future growth. But with concerns swirling in Washington about the risk that China will surpass the US in the race to develop AI, that makes it less likely the industry and regulators will slow efforts to advance the technology, Novogratz said.
There is a real feeling “with both the Democratic and the Republican Party that this is somewhat existential for us to get before China gets,” he said. “Because of that, we’re going to have a really hard time slowing AI down, even to the level that the guys building it want to slow it down.”