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Paul Tudor Jones says 2027 could be a really challenging year for the stock market
Jones said major AI-related offerings and secondary sales could create the toughest supply backdrop for U.S. stocks since 2002.
Paul Tudor Jones, founder of Tudor Investment, told CNBC on Tuesday that 2027 could be one of the most difficult years for the stock market in two decades, citing a coming wave of equity supply from major technology offerings.
Throughout the four-year bull market, corporate buybacks and mergers reduced available stock, but that favorable trend is now reversing as companies prepare for significant new issuances.
Jones expects large offerings from Anthropic and OpenAI in the AI space, alongside a recently completed SpaceX issuance, as companies pursue secondary sales for AI-linked infrastructure.
Declaring "I'll be short the whole year," Jones noted he sees "little value" in the current market, comparing the environment to the heavy issuance period of '98 and '99.
Investors are also weighing inflation, higher bond yields, and a more hawkish Federal Reserve as potential headwinds that could cause the bull market to lose momentum amid the supply surge.
Jones said that next year could be challenging for the stock market, due to the increased supply of shares that will result from the IPOs of large technology companies.
Paul Tudor Jones warns that the increase in emissions of technological shares and a lower boost for buybacks could make the US stock market particularly complicated in 2027. The investor also compares the current environment with that of the late 1990s and maintains an upward stance on oil, although he has pointed out that the AI-driven market could still advance for one or two years.