NYU professor and tech commentator Scott Galloway warns that the current artificial intelligence (AI) market is a massive bubble, predicting that high-flying tech stocks like Nvidia Corp. (NASDAQ:NVDA) could plummet by as much as 70%.
The AI Valuation Bubble
Speaking on the Inside Economics podcast alongside Moody’s chief economist Mark Zandi, Galloway cast heavy doubt on the sky-high expectations surrounding AI-centric companies.
He noted that the sector now represents roughly 40% of the S&P 500. For these companies to justify their astronomical revenue multipliers, Galloway argued they either need to drive unprecedented job destruction to create corporate efficiencies or face a severe market correction.
Galloway strongly believes the latter is imminent, predicting that major tech players will soon see their valuations slashed.
“If Nvidia goes down 70%, everyone’s going to feel it,” he cautioned, likening the potential crash to historical tech market corrections, such as Amazon.com Inc.‘s (NASDAQ:AMZN) brutal 97% drop during the early 2000s dot-com bust.
‘Corporate Ozempic’
Galloway also dismissed the apocalyptic narrative that AI will rapidly wipe out the global workforce, instead describing the technology as a convenient tool for corporate trimming.
“I find that AI is like corporate Ozempic,” Galloway stated. He explained that just as the popular weight-loss drug reduces caloric intake, AI allows tech companies to sever the traditional link between revenue growth and mass hiring.
Board members are now looking at their CEOs and asking how they can do more with less. This gives companies a way to enjoy “great taste with less calories” by quietly shrinking their workforce while maintaining profit margins.
A Cover For Incompetence
Ultimately, Galloway believes the catastrophic warnings from tech founders about AI destroying the labor market are mostly a smokescreen.
He argued that executives are using the promise of an AI revolution to “wallpaper over their managerial incompetence,” such as overestimating consumer demand or drastically overhiring during the COVID-19 pandemic.
According to Galloway, laying off thousands of employees under the guise of being a cutting-edge, AI-driven enterprise plays significantly better to Wall Street investors than admitting to poor business forecasting.
NVDA Underperforms In 2026
Shares of NVDA have declined by 4.19% year-to-date, mirroring the losses in the Nasdaq 100 index, which fell by 4.14% in the same period.
The stock was 0.56% higher over the last six months and 48.05% over a year. It closed 1.99% higher at $178.68 apiece on Wednesday.
Benzinga’s Edge Stock Rankings indicate that NVDA maintains a weak price trend over the short and medium terms but a strong trend in the long term, with solid quality score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: JRdes via Shutterstock
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