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Jamie Dimon <\/p>\n Jamie Dimon <\/p>\n
Markets have been turbulent over the past year, battered by geopolitical tension and trade uncertainty. Now, a new worry is rattling investors on both sides of the U.S.-Canada border: the possibility that artificial intelligence (AI) stocks have become dangerously overvalued.<\/p>\n
Jamie Dimon, CEO of JPMorgan Chase \u2014 the largest bank in the U.S. by total assets \u2014 has been sounding the alarm. He\u2019s worried about soaring asset prices and a pattern of AI companies heavily investing in one another (1).<\/p>\n
\u201cMy own view is people are getting a little comfortable that this is real, \u2014 these high asset prices and high volumes \u2014 and that we won\u2019t have any problems,\u201d Dimon said at JPMorgan\u2019s annual investor update in February.<\/p>\n
The scale of spending behind today\u2019s AI boom is staggering. Amazon, Google, Meta and Microsoft have already committed nearly US$600 billion (C$815 billion) to building AI data centres \u2014 and that\u2019s just the beginning. Industry analysts project total global spending will reach US$1.7 trillion (C$2.3 trillion) by 2030 \u2014 more than the Apollo moon program cost, in today\u2019s dollars (2).<\/p>\n
What\u2019s raising eyebrows is more than just the size of the investment \u2014 it\u2019s who\u2019s investing in whom. OpenAI purchased a major stake in AMD (3). NVIDIA committed US$100 billion (C$136 billion) to OpenAI. Microsoft holds a significant ownership stake in OpenAI while spending heavily in CoreWeave, an AI cloud company backed by NVIDIA. A handful of companies appear to be inflating each other\u2019s valuations in a loop \u2014 a pattern that, according to strategists at Goldman Sachs \u201crhymes with previous bubbles (4).\u201d<\/p>\n
Dimon himself says it reminds him of the years before the 2008 financial crisis. \u201cThere\u2019s always a surprise in a credit cycle,\u201d he said. This time, he thinks software companies could be most exposed \u2014 the way phone and utility companies were in 2008 and 2009 (5).<\/p>\n
\u201cThere will be a cycle one day, he added. \u201cI don\u2019t know what confluence of events will cause that cycle. My anxiety is high over it.\u201d<\/p>\n
AI enthusiasts have argued that today\u2019s investment wave will trigger a sweeping transformation of every industry. But the concentration of that spending raises real questions about how broad the gains actually are.<\/p>\n
One ripple effect is already visible: job losses (6). In late February 2026, Jack Dorsey\u2019s payments company Block cut 40% of its workforce \u2014 that\u2019s more than 4,000 people \u2014 with Dorsey stating that a much smaller team using the company\u2019s own AI tools could do the work more efficiently.<\/p>\n
And Block wasn\u2019t alone \u2014 Amazon, Salesforce and other large employers have also cited AI as the reason behind recent mass layoffs (7).<\/p>\n
Dimon has been blunt about his unease. \u201cWhen I think about all the factors taking place, I take a deep breath and say watch out,\u201d he said (8).<\/p>\n
And he\u2019s not alone in his concern. Adam Slater, lead economist at Oxford Economics has warned that there are \u201cpotential symptoms of a bubble\u201d in the current situation (9). It points to rapid growth in tech stock prices, stretched valuations and extreme optimism about a technology that still carries enormous uncertainties. Slater also noted that without tech investment, the U.S. GDP would have barely grown in the first half of 2025 \u2014 which means a correction would hurt the broader economy, much less the tech sector (10).<\/p>\n
Meanwhile, the so-called Buffett indicator \u2014 which measures total U.S. stock market capitalization against GDP \u2014 has recently hit around 220%, its highest level on record (11). Every time the indicator has reached such extremes in the past, a significant market correction followed.<\/p>\n
For Canadian investors, the risk is real even if the bubble is centred in the U.S. Canadian pension funds, index funds and ETFs all carry significant exposure to American equities. CPP Investments Board (CPPIB), which manages retirement savings for more than 22 million Canadians, now has 47% of its portfolio invested in the United States \u2014 up from 36% only two years earlier (12). The CPPIB\u2019s own CEO John Graham has said the fund is monitoring concentration risk in U.S. tech stocks closely (13).<\/p>\n
A sharp correction in AI-heavy U.S. equities would quickly show up in Canadian portfolios. That\u2019s why many advisors recommend reviewing your asset mix now \u2014 before any correction happens \u2014 rather than reacting to it after the fact.<\/p>\n
If you\u2019re unclear how much U.S. tech exposure you have, a registered financial advisor can help you understand where you\u2019re at. You can find a Certified Financial Planner through FP Canada\u2019s public registry (14).<\/p>\n
Read more: The ultra-rich are bailing on volatile stocks right now \u2014 these 4 shockproof assets are their new safe havens<\/a><\/p>\n If you\u2019re looking to move away from tech stocks and broaden your portfolio, there\u2019s one sector that has proven to be relatively stable amidst trends and market shocks.<\/p>\n Real estate has a long track record as both an income generator and portfolio diversifier \u2014 it\u2019s an asset class that doesn\u2019t move in tandem with stocks or bonds. Here are the main ways you can add real estate exposure to your portfolio.<\/p>\n Buying a rental property is the most hands-on approach. Done well, it generates monthly cash flow and builds equity over time. The catch is, you\u2019ll need a sizeable down payment \u2014 typically 20% for an investment property \u2014 and you\u2019ll take on landlord responsibilities such as finding tenants, handling maintenance, collecting rent and navigating provincial tenancy laws.<\/p>\n Mortgage rates for investment properties are also generally higher than for a primary residence. It means going the distance, but comes with a solid track record for investors with patience.<\/p>\n House flipping<\/a> involves buying a property at below-market value, renovating it then selling the residence for a profit \u2014 usually within a few months and up to a year. Returns can be strong, but margins have tightened with rising construction costs, higher insurance premiums and increased competition from buyers with high capital. There\u2019s also a tax consideration worth noting: Under Canada\u2019s residential flipping rule, profits on homes sold within 12 months of purchase are treated as fully taxable business income rather than a capital gain (15).<\/p>\n If you\u2019re an investor who wants real estate exposure without buying a property, Real Estate Investment Trusts<\/a> (REITs) are the most accessible option. A REIT is a company that owns and operates income-generating properties \u2014 apartment buildings, shopping centres, industrial complexes, health-care facilities and more. They trade on the TSX like regular stocks and are required to distribute a large share of their taxable income to investors, making them a popular source of passive income.<\/p>\n You can buy individual REITs through any online brokerage, or invest in a REIT exchange-traded fund<\/a> (ETF) \u2014 a single fund that holds a basket of REITs across multiple sectors and regions. One tax note about REITs: Any distributions held within a Tax-Free Savings Account<\/a> (TFSA) or Registered Retirement Savings Plan<\/a> (RRSP) are sheltered from tax. But in a non-registered account, any distributions are taxed as ordinary income, rather than capital gains or eligible dividends.<\/p>\n Crowdfunding platforms<\/a> let you invest in real estate projects alongside other investors, often with a much smaller minimum than a traditional property purchase. Instead of buying the property outright, you own a fraction of a project and earn returns through rental income, property appreciation or both.<\/p>\n Some platforms are also RRSP- and TFSA-eligible. The key tradeoff is liquidity: unlike a publicly traded REIT, you typically can\u2019t exit a crowdfunding investment on short notice.<\/p>\n Each of the above options carry different levels of risk, capital requirements and time commitment. The right fit depends on your financial goals, risk tolerance and how involved you want to be.<\/p>\n Warning signs of an AI bubble about to burst are mounting \u2014 from the Buffett indicator hitting record levels, the world\u2019s biggest tech companies pouring hundreds of billions into each other\u2019s operation to major employers already citing AI as the reason to cut jobs. Jamie Dimon and Oxford Economics have already flagged the same concern: A correction may be coming, and if it does, the effects will be widespread.<\/p>\n Canadian investors aren\u2019t insulated. With CPP Investments holding nearly half its assets in the U.S., and most index-tracking ETFs weighted heavily toward tech, the exposure is real.<\/p>\n Your next best move isn\u2019t to panic \u2014 it\u2019s to prepare. Review your asset mix, understand where your risk lies and consider whether real estate could help balance your portfolio. And if you aren\u2019t sure where to start, a conversation with a registered financial advisor is a smart first step.<\/p>\n \u2014 with files from Melanie Huddart<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n CNBC (1, 5, 8, 9, 10<\/a>) (6<\/a>); Dell\u2019Oro Group (2<\/a>); CNN (3, 4<\/a>); CBC (7<\/a>) (12<\/a>); Guru Focus (11<\/a>); Financial Post (13<\/a>); FP Canada (14<\/a>); Elk Hangary Accounting (15<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Jamie Dimon Markets have been turbulent over the past year, battered by geopolitical tension and trade uncertainty. 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