This Billionaire Hedge Fund Manager Says These Are 'Crazy Times'—But He's Buying More AI Stocks

When will the music stop for the AI trade? Maybe not before the “crazy times” have passed.

The renewed investor taste for chip makers and companies supplying materials and equipment for data center builds has driven the S&P 500 and the tech-heavy Nasdaq Composite benchmarks to new records lately. Investor appetite for anything to do with artificial intelligence has even pushed companies with ostensibly little to do with it— like struggling sneaker makers—to pivot toward the trend. And hedge fund billionaire Paul Tudor Jones, of Tudor Investment Corp. is buying— at least for now.

WHY THIS MATTERS TO YOU

Though AI stock valuation concerns were more dominant last year, some expert investors are still warning of a possible bubble in AI stocks.

“I bought more AI stocks,” Jones told CNBC on Thursday, saying he invested in a basket of them rather than choosing winners or losers. These, he said, are “crazy times” reminiscent of the period right before the Dotcom Bubble burst.

Jones likened the current vibe —marked, he said, by the January debut of Anthropic’s Claude Code tool—to when Microsoft in 1981 rolled out MS-DOS 1.0 for IBM’s personal computer, citing beginning of what he called “productivity miracles.”

A massive efficiency boom has yet to materialize in the AI age, but investors are excited about the prospects, and picks-and-shovels companies’ are benefitting—they’re showing outsize growth this earnings season—from mega tech companies spending to build out their capabilities. That’s continued to lift tech shares to highs, placing investors in a precarious position where they may wonder constantly just how much further things can climb.

Indeed, Jones warned that the AI trade won’t rally forever, saying it likely had “another year or two to run.” After that, he said, investors are likely to see “one of those breathtaking corrections.” Jones has seen those before, too: He made his fortune shorting the 1987 stock market crash.

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