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Goldman Sachs CEO Predicts Equities Drawdown in Next 12-24 Months
ByAinvest
Saturday, Oct 4, 2025 3:13 am ET1min read
Goldman Sachs CEO David Solomon predicts a potential drawdown in equities within the next 12-24 months, citing historical patterns of market cycles and the excitement surrounding artificial intelligence. However, he remains optimistic about the US economy accelerating into 2026, driven by trade policies, stimulus, and tech spending.
Goldman Sachs CEO David Solomon has warned of a potential market drawdown in the next 12-24 months, drawing parallels to past tech bubbles and the current artificial intelligence (AI) investment frenzy. Speaking at the Italian Tech Week conference in Turin, Solomon cautioned that the AI investment cycle could follow a similar pattern to previous tech investment cycles, potentially leading to significant capital losses [1].Solomon's prediction comes amidst record-breaking highs in US stock markets, largely driven by AI-related investments. The current AI boom has led to unprecedented market valuations, with companies like Nvidia reaching a market value of $4.6 trillion. Silicon Valley giants are pouring hundreds of billions of dollars into AI-related investments, particularly in data centers [1].
While Solomon remains optimistic about AI's long-term potential, he warned that not all AI investments will yield the expected returns. He drew comparisons between the current AI investment frenzy and the internet boom of the late 1990s and early 2000s, suggesting that a significant portion of deployed capital may not deliver returns [1].
Despite his caution, Solomon believes that the US economy is "in pretty good shape," with fiscal stimulus and AI data center investments providing a "pretty good tailwind." He predicted that the US economy would accelerate by 2026, driven by robust government spending and the construction of artificial intelligence infrastructure [2].
Solomon's optimistic outlook on the economy contrasts with his recent stance on the US stock market. He predicts that the stock market may experience a "correction" within the next 12 to 24 months, following a prolonged rally. However, he emphasized that such a correction is normal and should not trigger excessive concern [2].
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