This hedge-fund legend just warned investors not to chase stocks higher. Why he is investing in AI anyway.

Hedge‑fund legend Paul Tudor Jones told CNBC he’s recently bought more AI stocks and believes the AI‑driven rally could have “another year or two” to run, with as much as ~40% upside. He cautioned, however, that lofty valuations leave markets vulnerable to a severe reversal — saying U.S. market capitalization could climb to 300%–350% of GDP and warning of a potentially “breathtaking” selloff. Jones compared today’s AI cycle to late‑1990s tech euphoria, noting historical parallels and productivity booms lasting several years. The comments are bullish for AI names near term but underline elevated systemic risk that could amplify downside if sentiment turns.