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'A cyclical downturn is inevitable' in an AI crash: Strategist Dario Perkins

A cyclical downturn is inevitable if the current artificial intelligence market rout continues to gain steam, according to a new paper titled Wargaming the AI Crash by TS Lombard chief macroeconomic strategist Dario Perkins. Perkins outlines a scenario where an artificial intelligence bubble bursts, potentially sending US technology stocks down significantly. While the timing of such a crash remains difficult to predict, the strategist warns that investors should avoid trying to time the market pop as the artificial intelligence investment theme faces mounting pressures from spending fears and shifting market sentiment.

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  • ✓ TS Lombard chief macroeconomic strategist Dario Perkins authored a paper titled Wargaming the AI Crash.
  • ✓ The strategist warns that a cyclical downturn is inevitable if weakness in technology stocks continues to gain steam.
🛡️ Source Corroboration: 14 independent reporting domains (90% confidence) ⏱ Read time: ~2 min

What changed

TS Lombard released a strategic paper examining the mechanics and potential fallout of a future artificial intelligence market crash.

Live updates

  1. Strategist Warns Cyclical Downturn Inevitable in AI Crash

    A cyclical downturn is inevitable if the current artificial intelligence market rout continues to gain steam, according to a new paper titled Wargaming the AI Crash by TS Lombard chief macroeconomic strategist Dario Perkins. Perkins outlines a scenario where an artificial intelligence bubble bursts, potentially sending US technology stocks down significantly. While the timing of such a crash remains difficult to predict, the strategist warns that investors should avoid trying to time the market pop as the artificial intelligence investment theme faces mounting pressures from spending fears and shifting market sentiment.

    Why it matters

    Market participants are increasingly examining vulnerabilities in the artificial intelligence sector as upcoming earnings reports and Federal Reserve meetings test a fragile stock market rally. Analysts point to growing concerns over heavy artificial intelligence spending and whether the technology can deliver sufficient returns to justify massive capital outlays. These anxieties arrive alongside broader questions about whether artificial intelligence enthusiasm is losing its power to drive broader equity gains.

    What is confirmed

    • TS Lombard chief macroeconomic strategist Dario Perkins authored a paper titled Wargaming the AI Crash.
    • The strategist warns that a cyclical downturn is inevitable if weakness in technology stocks continues to gain steam.

    Still unconfirmed

    • The artificial intelligence bubble could specifically burst around early 2028, leading to a plunge in US technology stocks by up to 40 percent and broader US stocks by at least 30 percent.

    What to watch next

    • Upcoming corporate earnings reports from major technology companies
    • Decisions and commentary from upcoming Federal Reserve meetings
    • Shifts in investor spending patterns regarding artificial intelligence infrastructure
    Sources used for this update (16)
    1. finance.yahoo.com — Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
    2. flipboard.com — Beloved singer’s wife killed after welcoming robbery suspects with lemonade
    3. WSJ — Stock Pickers Burned by the AI Boom Think Their Moment Has Finally Arrived
    4. Yahoo Finance — 'A cyclical downturn is inevitable' in an AI crash: Strategist Dario Perkins
    5. Reuters — Wall St Week Ahead Earnings flood, Fed meeting will test rickety AI market rally
    6. Axios — AI pixie dust is losing its stock market power
    7. Bloomberg.com — Why AI’s Success Could Deeply Damage Markets: Merryn Talks Money
    8. The Telegraph — The tech ‘death spiral’ that could destroy the AI boom
    9. Bloomberg.com — AI Spending Fears Threaten to Swamp Big Tech’s Strong Earnings
    10. Seeking Alpha — The AI Bubble Has A $3.6 Trillion Problem, And It's Getting Worse (NYSEARCA:SPY)
    11. finance.yahoo.com — 'A cyclical downturn is inevitable' in an AI crash ...
    12. www.philstockworld.com — ‘A cyclical downturn is inevitable’ in an AI crash ...
    confidence 90%
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