Anticipated Volatility in AI Stocks for 2026

December 28, 2025 - 03:49

The surge in artificial intelligence (AI) stocks has significantly contributed to market gains over the past few years. However, experts are cautioning investors about potential instability ahead. Baird Tech Strategist Ted Mortonson has indicated that 2026 may bring a "tremendous amount of volatility" to the AI sector. This forecast stems from the expected public offerings of major AI players, which could lead to significant shifts in the market landscape.

As these tech giants prepare to enter the public arena, portfolio managers may be compelled to reassess their holdings. The introduction of new market entrants like Anthropic could disrupt existing valuations and necessitate adjustments in investment strategies. Such changes could lead to a reevaluation of positions in current AI-related stocks, resulting in potential sell-offs.

Investors are advised to stay informed and prepared for a dynamic trading environment as the AI market evolves in the coming year.