Jeremy Grantham Calls This the Priciest US Market Ever
Legendary investor Jeremy Grantham warns AI-driven valuations have pushed US stocks to historic extremes.
Jeremy Grantham isn't mincing words. The co-founder of GMO and one of Wall Street's most respected bubble-spotters has declared the current US stock market the most expensive in American history — and he's pointing squarely at artificial intelligence euphoria as the culprit.
Grantham has a track record worth paying attention to. He called the dot-com crash, the 2008 housing collapse, and the 2021 speculative frenzy. When he talks about dangerous valuations, smart traders don't just scroll past. His view is simple: AI hype has inflated prices to levels that make even the dot-com peak look reasonable by some measures.
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The core argument is about valuation stretch. When investors pile into a narrative — whether it's railroads, the internet, or now AI — they routinely overpay for future earnings that may take years, or decades, to materialize. Grantham believes the market is doing exactly that right now, pricing in an AI-fueled profit explosion before it's proven out. That creates serious downside risk if the earnings don't arrive on schedule.
For retail traders, this isn't just macro noise. If Grantham is right, the pain won't be evenly distributed — high-multiple tech names tied to the AI story carry the most exposure. Hedging, trimming outsized positions, and keeping powder dry could matter more than chasing momentum from here. Grantham's warnings have sometimes been early, but they've rarely been wrong.
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