Paul Tudor Jones, legendary hedge fund manager and founder and CIO of Tudor Investment, flagged that 2027 could be an extremely difficult year for US stocks, as several big-ticket technology IPOs, rising equity supply and mounting fiscal deficits threaten to weaken the market's four-year bull run.
“2027 is going to be really, really challenging for the stock market,” Jones told CNBC's Squawk Box on Tuesday. “You've probably got the most negative flow picture for the US stock market that we've had, say, since 2002.”
He further added that corporate share buybacks, along with mergers and acquisitions, had supported the market during much of the current bull run by reducing the supply of equities. That dynamic could now reverse in the AI space, with Anthropic and OpenAI ahead, along with one just finished for SpaceX. Jones also expects more secondary offerings from companies in order to raise money for the AI build-out.
These factors together can result in an increased equity supply picture that could weigh on stock prices
Jones compared today's market with 1999, the year before the dot-com bubble burst in 2000. He pointed to a growing divide between companies benefiting from the AI boom and those that are not.