Business
Are my pensions or investments at risk from an AI bubble?
Artificial intelligence (AI) has been the story driving global markets for the past couple of years.
From chipmakers to cloud computing giants, companies associated with AI have driven stock markets to record highs. But alongside the excitement, warnings are growing louder.
With several of the so-called Magnificent 7 (Mag 7) seeing declines in recent months, investors are becoming increasingly nervous that the AI bubble is about to burst.
If this happens, will it be bad news for your pension or investment portfolio?
What is a stock market bubble?
A stock market bubble occurs when asset prices rise rapidly, driven by investor overconfidence and speculation.
Bubbles are dangerous because prices become wildly disconnected from the real value of the companies underneath.
This means they can collapse suddenly and without warning.
When that happens, pensions and investments tied to those inflated stocks can suffer sharp, painful losses that take years to recover from.
Who are the ‘Magnificent 7’?
The Mag 7 is a group of major tech companies with stock growth that, on average, has far outpaced the general stock market over the past decade.
All seven of the firms – Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla – are heavily involved in AI, from providing the infrastructure to developing consumer-facing AI applications.
The spectacular rise of these firms has been powering the performance of major indices including the S&P 500 and the Nasdaq Composite.
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Why do experts fear a bubble?
Several major financial institutions have raised concerns that the market may be entering bubble territory, with valuations increasingly detached from underlying earnings.
Back in December 2025, the Bank of England warned that if the AI boom deflated suddenly, the shock could impact the pension pots and investment portfolios of ordinary savers.
Analysts at the bank warned that UK share prices were close to their most overstretched levels since the 2008 financial crisis and that US equity valuations were starting to resemble the run‑up to the 1990’s dot-com crash.
Several of the Mag 7 have stumbled in early 2026, with Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla posting negative returns over the past month. Apple was the only member showing a small gain.
Dan Kemp, CEO and founder of Portfolio Thinking, says: “The recent wobble in these share prices isn’t just about valuation; it’s a referendum on their spending. The market is waking up to the reality that these companies are burning billions on AI infrastructure with no guarantee of immediate returns. It’s less of a bubble popping and more of a reality check: investors are realising they’ve priced in perfection for companies that are currently undertaking the most expensive construction project in history.”
Katy Stoves, investment manager at Mattioli Woods, points out that AI bubble concerns extend far beyond the Mag 7.
“Growing levels of capital expenditure across the sector – with tech giants pouring billions into AI infrastructure – combined with fears about how AI could fundamentally disrupt software business models, are creating sector-wide jitters,” she explains.
What do AI bubble fears mean for pensions?
For people approaching retirement or already drawing an income from their pension, a sudden market correction can be particularly damaging.
The danger for retirees is bad timing – if the market drops just as you start withdrawing income, it can permanently damage your pot.
“The best defence isn’t to sell everything, but to ensure your portfolio has a ‘crumple zone,’” says Kemp.
“If you are near retirement, you should hold enough cash or bonds to cover your spending for a few years. This buys you the luxury of time, allowing you to wait for the tech sector to recover without having to sell assets at a loss to pay the bills.”
What do AI bubble fears mean for investors?
For anyone investing through ISAs or general investment accounts, the risk is similar. A sudden drop in tech valuations could drag down overall portfolio performance.
Even investors who don’t hold individual tech stocks may be exposed through global index funds, which are increasingly dominated by large US technology firms.
Andrew Prosser, head of investments at InvestEngine, says: “Investors can’t control whether AI gets overhyped or whether tech sells off. What they can control is making sure they’re holding a sufficiently diversified portfolio, and understanding the size of drawdowns it could realistically experience. That way, if a sell-off does arrive, it won’t come as a shock, and they’re less likely to panic at the worst possible time.”
In the end, market ups and downs are part of investing. What matters most is staying focused on the long term, keeping a diversified portfolio, and resisting the urge to react to every market wobble.
When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results.
Business
JPMorgan CEO Jamie Dimon in annual letter cites risks in geopolitics, AI and private markets
JPMorgan Chase CEO Jamie Dimon is calling for a broad recommitment to American ideals as his bank navigates geopolitical uncertainty, a teetering economy and the revolutionary impact of artificial intelligence.
Dimon in his annual letter to shareholders, published Monday, noted the country’s 250th anniversary as “the perfect time to rededicate ourselves to the values that made this great nation of ours — freedom, liberty and opportunity.”
“The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China,” Dimon said. “Even in troubled times, we have confidence that America will do what it has always done — look to the values that have defined our singular nation and sustained our leadership of the free world.”
Dimon, the longtime leader of the world’s largest bank by market cap, is among the most outspoken of U.S. corporate leaders. His annual letter offers not only a matter of record for his firm’s performance, but also sweeping perspectives on the global state of affairs.
In Monday’s letter, Dimon noted headwinds including global conflicts, persistent inflation, private market upheaval and what he called “poor bank regulations.”
Dimon said that while regulations like those put in place after the 2008 financial crisis “accomplished some good things … they also created a fragmented, slow-moving system with expensive, overlapping and excessive rules and regulations — some of which made the financial system weaker and reduced productive lending.”
He specifically cited negative consequences of capital and liquidity requirements, the current construction of the Federal Reserve’s stress test and a “badly handled” process at the Federal Deposit Insurance Corp.
Dimon also said JPMorgan’s reaction to revised proposals for Basel 3 Endgame and a global systemically important bank, or GSIB, surcharge — issued by U.S. regulators last month — were “mixed.”
“While it was good to see that the recent proposals for the Basel 3 Endgame (B3E) and GSIB attempted to reduce the increase in required capital from the 2023 proposals, there are still some aspects that are frankly nonsensical,” Dimon said.
The CEO said with the aggregate proposed surcharges of about 5%, the bank would need to hold “as much as 50% more capital across the vast majority of loans to U.S. consumers and businesses when compared with a large non-GSIB bank for the same set of loans.”
“Frankly, it’s not right, and it’s un-American,” he said.
On trade and geopolitics
Dimon identified geopolitical tensions as the primary risk facing his bank, namely the wars in Ukraine and Iran and their impacts on commodities and global markets — deeming war “the realm of uncertainty.”
“The outcome of current geopolitical events may very well be the defining factor in how the future global economic order unfolds,” he said. “Then again, it may not.”
He also cited a “realignment of economic relations in the world” brought on by U.S. trade policy. U.S. President Donald Trump has made tariffs a signature policy of his second term in office, introducing higher duties on dozens of trade partners and import categories.
“The trade battles are clearly not over, and it should be expected that many nations are analyzing how and with whom they should create trade arrangements,” Dimon said. “While some of this is necessary for national security and resiliency, which are paramount, it is hard to figure out what the long-term effects will be.”
On private markets
Dimon also spoke to recent upheaval in the private markets, as fears around loans made to software firms spur massive redemption requests at private credit funds.
“By and large, private credit does not tend to have great transparency or rigorous valuation ‘marks’ of their loans — this increases the chance that people will sell if they think the environment will get worse — even if actual realized losses barely change,” Dimon said.
The executive added that actual losses are already higher than they should be relative to the environment.
“However this plays out, it should be expected that at some point insurance regulators will insist on more rigorous ratings or markdowns, which will likely lead to demands for more capital,” he said.
On AI
Dimon reiterated Monday that the pace of AI adoption is unlike any technology that came before it. He said while its implementation will be “transformational,” it remains to be seen how the AI revolution will unfold.
“Overall, the investment in AI is not a speculative bubble; rather, it will deliver significant benefits. However, at this time, we cannot predict the ultimate winners and losers in AI- related industries,” Dimon said.
“We will not put our heads in the sand. We will deploy AI, as we deploy all technology, to do a better job for our customers (and employees),” he wrote.
JPMorgan has been at the forefront of Wall Street firms introducing AI at every level of its business. Last year, JPMorgan Chief Analytics Officer Derek Waldron gave CNBC an early demonstration into how it’s using agentic AI to speed up work and improve results for customers and shareholders.
In February, Dimon said AI was reshaping JPMorgan’s workforce and that the bank had “huge redeployment plans” for employees.
“We have focused on some of the ‘known and predictable’ and some of the ‘known unknown’ events,” he said. “But huge technological shifts like AI always have second- and third-order effects as well that can deeply impact society. … We should be monitoring for this kind of transformation, too.”
— CNBC’s Leslie Picker and Ritika Shah contributed to this report.
The prices of gold increased in the local market on Monday, with 24-karat gold per tola rising by Rs1,100 to settle at Rs491,462 compared to Rs490,362 on the previous trading day, according to rates issued by the All Pakistan Sarafa Gems and Jewellers Association.
Similarly, the price of 10 grams of 24-karat gold increased by Rs943 to Rs421,349 from Rs420,406, whereas 10 grams of 22-karat gold went up by Rs864 to Rs386,250 against Rs385,386.
In the international market, the price of gold increased by $11 to $4,687 per ounce from $4,676.
Meanwhile, the price of silver per tola decreased by Rs 50 to Rs 7,744 from Rs 7,794, while the price of 10 grams of silver declined by Rs 43 to Rs 6,639 from Rs 6,682.
The price of silver in the international market also decreased by $0.50 to $72.60 per ounce from $73.10.
Hyderabad: Aurobindo Pharma’s board on Monday approved a Rs 800 crore share proposal to buy back up to 54.23 lakh fully paid-up equity shares of the company of face value Rs 1 each at Rs 1,475 a share.The proposed buyback, which is subject to regulatory and statutory approvals, represents up to 0.93% of the total number of equity shares in the company’s total paid-up equity share capital.The Hyderabad-based generics drug maker informed the bourses that April 17, 2026, has been fixed as the record date to determine shareholder eligibility and entitlement for the buyback, which will be carried out through the tender offer route on a proportionate basis, in line with SEBI’s Buyback Regulations and the Companies Act.All eligible equity shareholders, including promoters and promoter group entities holding shares on the record date, will be entitled to participate in the offer for which the company has already constituted a buyback committee.The company also said the board or buyback committee may increase the buyback price and correspondingly reduce the number of shares to be bought back up to one working day before the record date but the overall size will remain unchanged.The Rs 800 crore buyback size excludes transaction costs and related expenses such as brokerage, taxes, filing fees, legal charges and publication expenses, it said.The latest buyback comes less than two years after the last buyback offer aggregating to Rs 750 crore that was made at Rs 1,460 a piece in August 2024 by the company.As of December 31, 2025, promoters and promoter group entities held 51.82% stake in the company, mutual funds 19.52%, foreign portfolio investors 13.94%, insurance companies 5.50%, and public shareholders and others 7.93%.
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