Legendary macro investor and hedge fund manager Paul Tudor Jones warned that 2027 could be challenging for U.S. stocks: the market is expecting a sharp increase in the supply of shares from major companies working with artificial intelligence. Tudor Jones believes that the influx of new shares could change investors' attitudes towards risky assets, including Bitcoin.
Over the past four years of the bull market, buybacks and mergers and acquisitions have reduced the number of shares available on the market. Now this support is weakening: a wave of major tech offerings, primarily in the AI sector, is hitting the market. Tudor Jones listed the sources of new shares: potential IPOs or additional issues from Anthropic and OpenAI, SpaceX deals, as well as subsequent additional issues when companies raise funds for AI infrastructure development.
He drew parallels with the late 1990s and early 2000s, when active company listings and the lifting of restrictions on stock sales gave an advantage to short sellers.
"2027 will be truly challenging for the stock market. The flows will be the most negative for the U.S. stock market since 2002," Tudor Jones said on CNBC. He stated that he intends to hold short positions throughout the year because he sees no value in the market. He admits that the rally driven by AI development could continue for another year or two, but he remains cautious about stock valuations.
Difficulties in the stock market could support Bitcoin. Historically, periods of instability in the stock market have sometimes led to capital flows into scarce assets that are not dependent on the traditional market. The strictly limited issuance of 21 million coins sharply distinguishes Bitcoin amid the influx of new shares that Tudor Jones expects.
"Gold reserves are replenished by a few percent annually. Bitcoin is the only asset whose production is so strictly limited. It is decentralized. Therefore, it has the highest value due to its scarcity," noted Tudor Jones.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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