‘Another dot-com bubble?’ How OpenAI, Anthropic IPOs could pressure stocks in 2027
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.
“I'll be short the whole year. There just — there's little value,” Jones said, referring to his market outlook.
He added that the years from 1998 to 2002 were particularly favourable for short sellers because companies repeatedly released additional shares into the market.
“You had all this issuance, all these IPOs in '98 and '99, and really 2000, 2001, 2002. Those were the easiest years to be short because you kept having these unlocks that just kept adding supply to the market,” he said.
The US fiscal deficit is another concern for Jones, who believes financial markets could eventually force the government to address the imbalance through higher taxes or spending cuts.
“We're never going to fix these deficits until the market makes us to,” he said, comparing the potential reckoning with the 2008 financial crisis and the Troubled Asset Relief Program (TARP).
“No politician is going to voluntarily raise taxes or cut spending. They're going to be forced to,” Jones added.
Asked whether markets were approaching that tipping point, he said he would put the odds at 60-40 that the country was moving in that direction.
Oil prices could provide another headwind. Jones, who said he was long on oil, expects prices could rise by another $20–25 after the US midterm elections. Such a move, if it materialises, would be a further challenge for equities, he said.
Together, the potential increase in share issuance, fiscal risks and higher oil prices form the basis of Jones's warning that 2027 could prove particularly challenging for US stocks.
Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.
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