Paul Tudor Jones is buying more AI stocks, betting the bull market has 40% more to run before a “breathtaking” correction.

Speaking on CNBC’s “Squawk Box” this morning, the Tudor Investment Corp founder compared the AI run to the late-1990s dot-com rally and said one Federal Reserve parallel may keep stocks ramping into next year.

Jones Compares AI Run To 1999

Jones said he buys AI stocks in baskets rather than picking single names, framing the cycle as a productivity miracle on par with widespread PC adoption in the early 1980s and the commercialization of the internet in the mid-1990s.

He pegged the January launch of Claude Code, the developer agent from privately held Anthropic, as the modern equivalent of Microsoft Corp (NASDAQ:MSFT)‘s PC release in 1981, when commercial adoption hit critical mass.

Past productivity cycles ran four to five-and-a-half years, putting the AI rally roughly 50% to 60% through.

The closer analog, Jones said, is fall 1999.

Multiples and earnings look like October or November of that year, four months before the dot-com peak in March 2000.

By that read, US stocks have another 40% to run, with market-cap-to-GDP potentially hitting 300% to 350% before what Jones called a “breathtaking” correction.

Polymarket Traders Mostly Agree

Prediction markets back the runway. Polymarket’s “AI bubble burst by…” contract gives end-2026 the highest implied odds of a crack-up at just 21%, with $2.8 million in volume betting the rally holds through next year.

The bigger question is which name leads it. Nvidia Corp (NASDAQ:NVDA) sits at a roughly $5 trillion market cap heading into Q1 FY2027 earnings on May 20, with the average Wall Street price target of $275 implying around 32% upside from $208, close to Jones’s call.

Polymarket traders price Nvidia at just 58.5% to still be the largest company in the world by year-end, with Alphabet Inc (NASDAQ:GOOGL) the closest threat at 30.5% after a 63% Google Cloud revenue surge in Q1.

Recession fears have fallen sharply since the Iran war has entered into a less kinetic phase, Polymarket prices a recession this year at 22%, down from 36% earlier in the conflict.

Why The Fed Setup Rhymes With 1999

Jones said the Fed backdrop also looks like 1999, when Y2K kept policymakers cautious into the dot-com peak. This cycle, the November midterms and incoming chair Kevin Warsh play a similar role.

He sees “no chance” of a cut and doubts Warsh hikes before the election, even with a 6% budget deficit and hyperscalers spending roughly 1% of US GDP on AI infrastructure. Polymarket agrees, pricing zero cuts this year at 55%.

Jones also warned AI regulation is overdue, telling CNBC the U.S. is “late already” and watermarking should arrive “tomorrow.”

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