FRANKFURT (dpa-AFX) – After two excellent years for stocks, 2025 could still be a nightmare for investors. Because of concerns that the euphoria surrounding artificial intelligence (AI) and enormous profits could go too far, a pillar of the record rally on the stock markets has begun to falter. Some experts fear a sharp correction or even the bursting of a bubble – and this after US President Donald Trump’s tariff package in April had already put a strain on investors’ nerves.
It currently looks like the DAX leading index will be able to finish strongly for the third year in a row, even without the usual year-end rally. After the recent price gains, the increase in 2025 will total around 19 percent. For comparison: the long-term DAX return is seven to eight percent per year.
However, since the rapid recovery from Trump’s tariff shock, the market has appeared nervous: at a high level, the Dax drops a few hundred points, then rises again – like last week. A warning signal?
Billionaire race for AI
In Germany, for example, the energy technology group Siemens Energy and the construction group HOCHTIEF are seen as benefiting from the AI boom because they provide the infrastructure for data centers.
However, the upward trend on the stock exchanges that has existed since autumn 2022 is largely based on the assumption that the fashionable topic of AI can inspire not only individual tech giants, but entire industries and economies, for example with efficiency gains. A corresponding amount of optimism is probably already priced into the stock markets, and not just in the highly valued tech stocks.
Bundesbank board member Michael Theurer warns of the potential for setbacks and a possible shock-like correction, as he told “Deutschlandfunk”.
Critics fear that too much praise has been given out in advance. They doubt that the hundreds of billions of dollars invested in AI data centers can be earned back in the foreseeable future.
According to the pessimists, the hot air could suddenly escape, which would also be felt by private investors. Because tech giants like Apple, NVIDIA, Alphabet (Alphabet A (ex Google)), Microsoft and Amazon not only drive the world stock markets, they also have a high weight in popular index funds (ETFs), such as the MSCI World global stock index, because of their immense stock market value.
Warning that the euphoria is fading
Even though the chip company Nvidia has recently put the brakes on AI concerns with strong figures, the warning voices about the boom are not falling silent. It is assumed that for many companies outside of the US tech giants, investments in AI are only paying off later than expected or are only barely paying off in cash.
Others like ECB Vice President Luis de Guindos criticize the increasing market concentration and networking between a handful of large tech companies. He repeatedly warned of a stock market correction.
Deutsche Bank also urges caution, but does not see a bubble. “AI is a game-changer and will remain a structural growth topic in 2026,” says Christian Nolting, global chief investment strategist for private clients. Huge investments are being made, especially in the USA and China.
So what to do? Experts advise private investors to remain calm. Even those who invest in stocks as broadly as possible with ETFs will sooner or later experience a crash with a drop in value of up to 50 percent, says Niels Nauhauser, financial expert at the Baden-Württemberg Consumer Center.
Historically, however, it rarely took more than four and never more than twelve years for the markets to fully recover after a crash. “Investment success does not depend on getting out in time before things crash,” says Nauhauser. Because not even professionals can do that. Rather, success depends on doing nothing and staying invested for the long term.
When does the party end?
In any case, it is questionable whether there is an AI bubble on the stock market. Already the legendary US Federal Reserve Chairman Alan Greenspan had difficulty making predictions. In 1996 he had warned of “irrational exuberance” on the stock markets, but the party would not burst until the dot-com bubble in 2000.
Other pillars of the recent stock market boom also appear intact. The global economy is growing, and sooner or later the US Federal Reserve will likely cut interest rates further in order to support the economy.
Martin Lück, chief capital market strategist at Franklin Templeton, sees no immediate danger. At least there is currently a lot of evidence to suggest that a lot will continue to be invested in the development of the AI infrastructure and that the companies involved could generate very good profits from it. “The stupid thing is: whether this is a bubble or not, we will only know in years.”/as/DP/e.g
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