Key Takeaways
- • Galaxy Digital CEO Michael Novogratz called AI "the biggest bubble of our lifetime" while urging traders to ride the trade, remarks made at the Greenwich Economic Forum panel and reported by Bloomberg News.
- • Novogratz argued that bubbles end "spectacularly" and that the current AI boom has not yet reached that stage, saying "this isn't spectacular enough."
- • He said AI-related stocks still look cheap on a price-to-earnings basis, and that investors not positioned in AI "might as well just go home."
- • Novogratz's comments follow a similar bubble warning from Ray Dalio, and come as Bank of America strategists recommend QQQ call spreads as a risk-limited way to gain AI exposure.
- • Novogratz's bullish stance is consistent with his own large AI-linked positioning, including a reported $3.5 billion bet on AI-focused data centers.
Summary
Galaxy Digital CEO Michael Novogratz has described the artificial intelligence trade as "the biggest bubble of our lifetime," while simultaneously advising investors to participate in it. Speaking on a panel at the Greenwich Economic Forum, Novogratz told attendees, as reported by Bloomberg News, that "bubbles don't end like we are today." Drawing on his experience, he said, "I know how bubbles end, and they end spectacularly, and this isn't spectacular enough," suggesting the current market has not yet reached the excess typically seen at a bubble's peak.
Novogratz also argued that AI-related stocks still screen as inexpensive on a price-to-earnings basis, a point that underpins his bullish view. "If you were not invested in AI, you might as well just go home and put your head in a bucket of ice," he said. Novogratz, who was also an early investor in bitcoin, is among a growing group of prominent investors commenting on AI valuations. His remarks follow a warning from Ray Dalio that the AI bubble is approaching the point where it may pop.
The comments arrive as Wall Street firms outline ways to position around the rally. Bank of America strategists said on Tuesday that investors wary of owning mega-cap technology stocks can use equity derivatives to benefit from the AI rally while hedging potential bubble risk. "We continue to like QQQ call spreads as an attractive, risk-limited upside expression," the strategists wrote in a note.
Novogratz's positioning gives context to his comments. Coverage of his investment activity highlights a reported $3.5 billion bet on AI-focused data centers, and profiles describe him as a contrarian, high-conviction investor. The tension in his message, calling a trade a bubble while urging investors to stay in it, reflects a view that valuations may still be supportable even as the risk of a sharp reversal grows.
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Novogratz also argued that AI-related stocks still screen as inexpensive on a price-to-earnings basis, a point that underpins his bullish view. "If you were not invested in AI, you might as well just go home and put your head in a bucket of ice," he said. Novogratz, who was also an early investor in bitcoin, is among a growing group of prominent investors commenting on AI valuations. His remarks follow a warning from Ray Dalio that the AI bubble is approaching the point where it may pop.
The comments arrive as Wall Street firms outline ways to position around the rally. Bank of America strategists said on Tuesday that investors wary of owning mega-cap technology stocks can use equity derivatives to benefit from the AI rally while hedging potential bubble risk. "We continue to like QQQ call spreads as an attractive, risk-limited upside expression," the strategists wrote in a note.
Novogratz's positioning gives context to his comments. Coverage of his investment activity highlights a reported $3.5 billion bet on AI-focused data centers, and profiles describe him as a contrarian, high-conviction investor. The tension in his message, calling a trade a bubble while urging investors to stay in it, reflects a view that valuations may still be supportable even as the risk of a sharp reversal grows.
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