BubbaTrading.com founder Todd Horwitz warned that debt tied to artificial intelligence could deepen a technology-stock selloff, raising questions about whether profits can support the borrowing behind AI investment.
In a Nov. 3 interview with David Lin, Horwitz said the recent retreat in technology shares had not eliminated what he sees as a stock-market bubble. He argued that earnings alone do not show whether AI companies can meet their financing obligations.
Horwitz said off-balance-sheet debt across AI businesses amounted to trillions of dollars. His concern was that companies might not generate enough profit to support their borrowing.
The Bank for International Settlements said in a January bulletin that borrowing was playing a growing role in AI investment, including through private credit. Its 2026 annual report identified potential credit risks if firms slow or halt capital spending.
Horwitz also argued that layoffs tied to AI could leave fewer workers contributing to retirement accounts and, in turn, reduce money entering the stock market. He presented that as a possible effect of job losses, not a measured change in investment flows.
He compared enthusiasm for AI stocks with the internet boom: The technology proved consequential, he said, while many investors lost money. He also raised the sharp downturn around Christmas 2018 as a possible parallel for year-end losses, framing it as a risk rather than a certain outcome.
Horwitz expected any market move driven by the U.S. midterm elections to fade, though he said positions taken before the result could amplify an immediate reaction. He acknowledged that stocks have tended to rise after elections, a pattern that runs against his bearish view.
His near-term scenario includes a sharp rebound over the next three or four weeks followed by further selling. He said pressure on stocks could continue through year-end.
