A market analyst argues that AI fundamentals are detached from stock prices and warns that leverage is increasing market volatility.
Simplify Asset Management’s Michael Green said AI fundamentals have become detached from their stock prices.
He told CNBC’s Squawk Box Asia that it is “totally absurd” for investors to assign a multiple to Google’s earnings after those results were boosted by the company marking up its position in Anthropic.
Green said he is seeing George Soros’s theory of reflexivity at work, with market prices and corporate behaviour reinforcing each other rather than reflecting independent fundamentals.
He warned the growing popularity of levered vehicles is increasing market volatility.
He said that heightened volatility tied to leverage has real-world implications for markets such as South Korea, where domestic flows and structural exposures can amplify moves.
