Jason Furman: AI bubble burst would mean 25% baseline stock market decline, 50% only tail risk
sebkrier · x · 2026-11-15
Former CEA chair Jason Furman published a new analysis on AI bubble risk, tackling how far stocks would fall if the market turns. His baseline: a 25% overall decline, with heavy skepticism that 50% is anything but a tail risk. His table of yardsticks back to "normal" valuations from the Nov 13 close: top-7 AI companies (Nvidia, Microsoft, Alphabet, Amazon, Meta, Broadcom, Oracle, 20% of market) halving → -11%; forward P/E back to post-1979 average of 15.0 → -18%; forward P/E to average plus 20% earnings drop → -34%; Shiller P/E to 23.6 → -41%; reversing excess growth over nominal GDP since 2019 → -34%.
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