Temasek Warns AI Trade Reversal Could Jolt Markets in 2027 as Half of Russell 3000 Lags
Updated
Updated · CNBC · Oct 7
Temasek Warns AI Trade Reversal Could Jolt Markets in 2027 as Half of Russell 3000 Lags
3 articles · Updated · CNBC · Oct 7
Summary
Temasek said the biggest market risk is an unwinding of the AI trade, with chief investment officer Rohit Sipahimalani warning that bumps could emerge in 2027 even if a reversal is not imminent.
Roughly half of Russell 3000 stocks sit at least 20% below their June highs, he said, arguing that U.S. equity resilience has been carried by a narrow group of AI-linked winners despite higher Treasury yields.
Potential triggers include tighter regulation driven by AI safety concerns or evidence that customers are not earning enough return on heavy AI spending.
Temasek still backs AI long term and wants 70% to 75% of its AI exposure in public assets, up from about half now, to pivot faster as the sector changes.