The Blow-Off Top Is Coming

Soaring AI stocks aren’t just reminiscent of the tech bubble in 1998-2000. Rather, they feel much like a Hollywood remake, nearly beat-for-beat.

Like the fervor for anything with a “.com” after it back then, AI exuberance is pushing stocks to be valued far higher than the reality of what AI will ever be recouped by earnings.

The end result?

Turn Your Images On

Overlaying the AI and dotcom boom, there’ s still more room to run (Source: Cheddar Flow)

If history continues to rhyme, we expect a final parabolic move higher to be in the works. One that may kick off near the end of the year and move into 2026.

A repeat of the dotcom bubble burst would be classic, too. The wheels will likely come off as soon as companies like Nvidia report a slowdown in their growth.

“In 2026, we could see a repeat of the 2022 bear market,” notes Portfolio Director Andrew Packer. “Some big pullbacks, a few strong counter-rallies to keep the hope alive, then a slow grind lower.”

~ Addison

P.S. Exuberance for AI has forced a historic concentration in a historically few stocks at the top. By definition, then, there are pockets of extreme value elsewhere in the market.

That includes materials, commodities, mining and energy stocks, as the Trump administration pushes for a stronger industrial policy and more domestic production.

Gold, firmly above $3700, will likely catch retail interest as central banks push prices higher and the Trump administration forces monetary changes. Our forecast for significantly higher gold prices continues to move in the right direction, and can play out even as the AI bubble meets its inevitable pin.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

Soaring AI stocks aren’t just reminiscent of the tech bubble in 1998-2000. Rather, they feel much like a Hollywood remake, nearly beat-for-beat.

Like the fervor for anything with a “.com” after it back then, AI exuberance is pushing stocks to be valued far higher than the reality of what AI will ever be recouped by earnings.

The end result?

Turn Your Images On

Overlaying the AI and dotcom boom, there’ s still more room to run (Source: Cheddar Flow)

If history continues to rhyme, we expect a final parabolic move higher to be in the works. One that may kick off near the end of the year and move into 2026.

A repeat of the dotcom bubble burst would be classic, too. The wheels will likely come off as soon as companies like Nvidia report a slowdown in their growth.

~ Addison

P.S. Exuberance for AI has forced a historic concentration in a historically few stocks at the top. By definition, then, there are pockets of extreme value elsewhere in the market.

That includes materials, commodities, mining and energy stocks, as the Trump administration pushes for a stronger industrial policy and more domestic production.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

What followed was bipartisan condemnation of the investigation. Greenspan, Bernanke, and Yellen co-signed a blistering rebuke, warning the U.S. was starting to resemble “emerging markets with weak institutions.”

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Not to fret, the other 85% of borrowers continue to spend on borrowed time. Total U.S. household debt, including mortgages, auto loans, student loans, and credit cards, reached record highs in late 2025, exceeding $18.5 trillion. This surge was driven partly by rising credit card balances, which neared their own all-time peaks due to inflation and higher interest rates.

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

A wise capital allocator doesn’t fight that storm. He doesn’t argue with it. He respects it the way sailors respect the sea: with preparation, with humility, and with a sharp eye for what breaks first.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

Total municipal, state and federal debt service costs soared to nearly $1.5 trillion in the third quarter of 2025. Debt’s easy to accumulate when rates are low. Trouble is, you are obligated to refinance them even after rates go up.

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.