AI stocks are in a bubble, says Citi’s Dirk Willer | The Business | ABC NEWS
Citi’s head of global macro strategy and asset allocation, Dirk Willer is visiting Sydney from New York. He addressed an investment conference before telling The Business US tech stocks are in a bubble. However, he doesn’t know when the bubble will pop.
He says “no-one wants to get off the train too early” because there are often large share price gains in the final run-up to the eventual peak.
As for the warning signs as to when the bubble is about to burst, he says when there is an over capacity in computing power and signs liquidity is drying up, it may be time to exit the market.
Dirk Willer told Alicia Barry, “it’s one feature of these bubbles that they’re highly, highly concentrated, so that’s a feature not a bug. But it also means when that leadership starts to underperform, that is a warning sign.”
He’s watching the performance of magnificent 7 stocks closely for warning signs. “If four or more of them break down you have to get more careful and we haven’t observed that. I mean, at this stage the leadership in the market is still holding on quite well in spite of everything that’s been thrown at it,” he said.
As for what happens if and when the bubble bursts, he expects a US recession to follow with cuts to US interest rates, which may then filter through globally. And for Australia, he says commodity prices will be hardest hit.
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Read more here: https://www.abc.net.au/news/2026-10-21/asx-markets-business-live-news-oct-22-2026/107290728
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