This week’s equity market wobble, which saw a retreat in U.S. AI-related stocks amid ongoing concerns over stretched valuations, has thrust contagion concerns into the spotlight for European investors.
Goldman Sachs
CEO David Solomon warned this week of a “likely” 10-20% drawdown in equity markets at some point within the next two years, while the International Monetary Fund and the Bank of England have both sounded the alarm bells.
Bank of England Governor Andrew Bailey highlighted the possibilities of an AI bubble in an interview with CNBC on Thursday, noting that the “very positive productivity contribution” from technology companies could be offset by uncertainty around future earning steams in the sector.
“We have to be very alert to these risks,” Bailey said.
