Stocks will tumble much further as AI investment will slow next year then fall in 2028 and drag GDP down too, economist predicts

An economist, as reported by Fortune, predicts that stocks will fall considerably further because AI-related investment will slow next year and then decline in 2028, dragging down GDP growth. The transmission mechanism runs through capital expenditure: AI infrastructure spending by hyperscalers and data center operators has been a significant contributor to US business investment, so a pullback would reduce a component of GDP directly while also tightening financial conditions via lower equity valuations and wealth effects on consumer spending. Assets most exposed are high-multiple AI-linked equities and semiconductor and data center supply chains, along with broader indices where index concentration in a handful of AI beneficiaries amplifies downside risk. Traders should watch the upcoming quarterly capital expenditure guidance from major cloud providers and the business investment line in the next GDP release, since any downward revision to forward spending plans would test whether the predicted slowdown is already visible in corporate budgets.

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