Josh Brown says AI bubble popping is the biggest risk to this market

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Josh Brown, CEO at Ritholtz, stated that artificial intelligence will be a major factor in the markets as we approach the end of this year. In a PROTalks interview conducted by Mike Santoli at the Delivering Alpha Conference, he stated that “AI is the greatest risk to the market”. “Yes, AI is exciting to me, but I am a human being. “I’m also very concerned that we might have gotten excited too early, and that poses a pretty substantial psychological risk for the market going into year-end.” AI is a hot topic among investors, and a few stocks that are seen as ways to profit from the popularity of this technology have soared. Nvidia, widely regarded as a good way to get investors exposed to AI, is one example. It has risen nearly 200% in the past year. NVDA.SPX.IXIC YTD mountain Nvidia vs. S & P 500 & Nasdaq Composite in this year. But, Brown says, several AI-related catalysts could sour the sentiment of the Nasdaq Composite’s megacap stocks. He said that a demand pull-forward, or Microsoft using large language models less than expected, could be an example. Brown cited another example where Nvidia saw more double orders than expected. Nasdaq, the technology-heavy index, has outperformed the other two major indices in this year’s performance. It gained more than 26 percent by 2023 due to a rebound of growth stocks and tech. Brown noted that technology played a positive role in improving the market sentiment during this year. He emphasized how Nvidia’s strong earnings report in May and positive outlook helped improve investor spirits. This marked a change from March and April when the banking crises roiled the market. Brown stated that “AI saved this year’s stock market, on an index level.” Brown said that Nvidia’s May guidance was “like a switch flick.” Nvidia’s market cap is now more than $1 trillion. This puts it in an exclusive club. Wall Street believes that Nvidia has more upside, even after its rally this year. The average price target set by LSEG analysts suggests the stock could rise another 45%.