Siegel Sees 30% Nasdaq Wobble If AI Bill Comes Due 🤖📉

WisdomTree's Jeremy Siegel has warned that the Nasdaq Composite could fall as much as 30% if spending on artificial intelligence fails to deliver the returns markets are currently pricing in, with the warning arriving on the 39th anniversary of the 1987 Black Monday crash. Siegel has repeatedly flagged risks in AI capital spending and has drawn comparisons with past cycles in which real demand existed but excess capacity later compressed returns for the largest spenders.

The Nasdaq Composite closed Friday at 26,140 after a 2.15% drop, marking its worst week since June and a decline of roughly 4.5%, with sentiment pressured by concerns over AI financing and hyperscaler debt issuance, elevated oil prices, higher yields and a spike in the VIX. On Monday, the index climbed as much as 1.8%, peaking near 26,600 around midday on gains in semiconductor and AI-infrastructure names before easing through the afternoon but finishing up 1.11% at 26,430.89. The S&P 500 also advanced, with one tracker noting the broad index added roughly $300 billion in market cap on the day, while the Dow held roughly flat.

Concentration risk in AI-linked technology stocks now drives much of the Nasdaq's exposure, meaning a sustained failure of AI spending to produce durable earnings could trigger a sharp revaluation concentrated in technology-heavy names. Interest rates shape how expensive it is to finance large AI projects through debt, a factor cited as relevant to the outlook.

Investors are watching upcoming earnings from Meta Platforms and Tesla, along with capital-spending updates, for evidence that productivity and revenue gains are holding. Siegel's long-term optimism about AI has not changed, but a sharp intermediate correction has become a clearer near-term risk, with investors having viewed the recent dip as a pause rather than a turn.