Episode summary
Legendary investor Paul Tudor Jones: 2027 is going to be really challenging for the stock market
Summary
Paul Tudor Jones said the market still feels like 1999: a two-speed tape where companies tied to AI move one way and everything else moves another. He argued that the near-term setup could still support a strong fourth quarter after the midterms, but the longer-term picture looks much less favorable. He said he is focused tactically on what happens through December 31st, while thinking that 2027 could be “really, really challenging” for stocks.
His main warning was about market flows. Jones said the U.S. stock market may be facing its most negative flow backdrop since 2002 once buybacks, M&A and other supportive forces are weighed against IPOs, secondaries and unlocks. He added that the rise of massive private AI companies like SpaceX, Anthropic and OpenAI changes the math for public markets and makes the environment harder for listed stocks.
Jones was positive on Anthropic relative to OpenAI, but said AI valuation debates are increasingly tied to safety concerns. He said investors are reassessing because spectacular revenue and earnings projections may not matter if a model goes rogue or is used maliciously, and he described AI safety as a long-standing concern given how neural networks can produce outputs without revealing the path that created them.
Key takeaways
- Paul Tudor Jones thinks the stock market still resembles 1999, with AI winners separating from everything else in a two-speed market.
- He sees a possible strong fourth quarter after the midterms, but says 2027 could be really challenging for stocks.
- Jones said the flow backdrop for U.S. equities may be the most negative since 2002 once buybacks, M&A, IPOs, secondaries and unlocks are netted out.
- He said large AI private-company valuations, including SpaceX, Anthropic and OpenAI, are changing the math for public equities.
- Jones views AI safety as a real risk because a model can produce strong outputs without investors knowing why or how it got there.
Notable quotes
“IT STILL FEELS LIKE 1999, A TWO SPEED MARKET. YOU'VE GOT IT COMPLETELY, PERFECTLY BIFURCATED”
“2027 IS GOING TO BE REALLY, REALLY CHALLENGING FOR THE STOCK MARKET”
“YOU'VE PROBABLY GOT THE MOST NEGATIVE FLOW PICTURE FOR THE US STOCK MARKET THAT WE'VE HAD, SAY, SINCE 2002”
“I THINK ANTHROPIC WILL DO WELL. I THINK OPENAI HAS A LOT OF IT WILL REST ON WHAT ANTHROPIC DOES”
“YOU KNOW WHAT THE OUTPUT IS, BUT YOU DON'T KNOW WHY OR HOW YOU GOT THERE”
How the episode opens
Welcome back to squawk box. This morning we are in midtown manhattan at good shepherd services, which is a beneficiary of the Robin Hood Foundation. Joining us right now in an exclusive interview is legendary investor Paul Tudor Jones.
Of course, he's the founder and chief investment officer of the Tudor Investment Corporation. He's also, of course, the founder and board member of the Robin Hood Foundation, which is hosting its annual investor conference next week. You got a huge lineup and it's great to see you.
And by the way, great to be here at good shepherd services, which is a foundation that robin hood has long supported.
We supported them for over 30 years. They're kind of like the kobe or the shaq of not for profits in new york city. They serve 30,000 kids.
Just a spectacular organization. I first met them. It was run by sister paulette, and if you met her, you would want to hug her.
She was just the most brilliant, loving, warm human being. And she says she's retired, but she's not. She still working and has new ideas.
And mitch mitchell, who runs the place, now, plays catch with her all the time. So it's a great place. And again, the best thing about this is this place.
It believes so firmly as we do. A child's circumstance does not determine their future.
I want to talk philanthropy in new york city and robin hood and this conference as well. But I want to talk markets. If you'd indulge me, because we have bank earnings coming out this morning. But I was thinking back to a conversation that we had about a year ago around the same time, and I had said something to the effect to you of where do you think we are in the market cycle?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- 2027 outlook
- stock market
- ai boom
- ai safety
- investor outlook
Companies and tickers mentioned
- Tudor Investment Corporation
- Robin Hood Foundation
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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