Jeremy Grantham warns AI boom pushed U.S. stocks to record high
Key takeaways
- Jeremy Grantham warns AI boom pushed U.S. stocks to record high Jeremy Grantham warns AI boom pushed U.S.
- "Based on the value of the stock market compared to GDP, with modifications, this is the most expensive market in American history," Jeremy Grantham, co-founder of investment firm GMO, told CNBC.
- Legendary investor Warren Buffett once said that when the indicator "approaches 200% — as it did in 1999 and a part of 2000 — you are playing with fire."
Jeremy Grantham warns AI boom pushed U.S. stocks to record high Jeremy Grantham warns AI boom pushed U.S. stocks to record high · Quartz · Yuichiro Chino / Getty Images Colleen Cabili Fri, June 26, 2026 at 10:57 PM GMT+7 2 min read Jeremy Grantham, a longtime investor known for bearish market calls, told CNBC's "Squawk Box" that AI-driven enthusiasm has carried U.S. equities to valuations never before seen in the country's history — and that a severe downturn may lie ahead.
"Based on the value of the stock market compared to GDP, with modifications, this is the most expensive market in American history," Jeremy Grantham, co-founder of investment firm GMO, told CNBC.
Among the metrics Grantham cited was a ratio comparing total stock market value to gross domestic product — a measure sometimes known as the Buffett indicator — which has climbed to 235%, putting the market at roughly two and a half times the size of the underlying economy. Legendary investor Warren Buffett once said that when the indicator "approaches 200% — as it did in 1999 and a part of 2000 — you are playing with fire."