Raiffeisen Warns of Potential AI Market Bubble

In recent years, companies associated with artificial intelligence (AI) have dominated stock markets worldwide. However, Matthias Geissbühler, Chief Investment Officer at Raiffeisen Bank, warns that this bubble might soon burst.

"As early as the fall of 2025, I had cautioned about the formation of a bubble," Geissbühler stated in an interview with the Awp agency. Although pinpointing the exact timing is challenging, he believes the risk is high "in the next two or three quarters."

Geissbühler's assessment is based on several developments within the sector. "A slowdown in investments could be a clue," he explains. "For instance, Meta recently announced plans to sell computing power, as it seems unable to independently utilize the planned infrastructure. To me, these signals indicate we are at a very advanced stage of a cycle."

"In the coming quarters, major hyperscalers"—cloud service providers managing vast data centers—"might reduce investments, potentially leading to a significant correction in semiconductor stocks," notes the Raiffeisen analyst. "Moreover, historically, large waves of initial public offerings (IPOs) have often signaled the peak of a cycle. Notably, by the end of the year, following SpaceX's IPO, two more heavyweights are poised to enter the market: Anthropic and OpenAI."

"There's a saying that the last ten percent of a rally can safely be left to speculators," Geissbühler remarks. Consequently, the bank has recently realized profits on some tech stocks and reduced its exposure in the sector.