'I Won't Be Surprised': Goldman Sachs CEO Eyes Wall Street's 'Drawdown' In 1-2 Years

The US stock market is staring at a possible “drawdown” in the coming one-two years according to Goldman Sachs CEO David Solomon as per a CNBC report . This comes after the markets have seen record high by AI frenzy.

The report further cited Solmon saying, “Markets run in cycles, and whenever we’ve historically had a significant acceleration in a new technology that creates a lot of capital formation, and therefore lots of interesting new companies around it, you generally see the market run ahead of the potential ... there are going to be winners and losers,” he said at Italian Tech Week in Turin, Italy, on Friday.

Referring to the dotcom bubble, Solomon highlighted the mass adoption of internet in the late 1990s, which although gave way to few of the world’s largest companies but also resulted in investors lose big sum of money due to the bubble.

“You’re going to see a similar phenomenon here,” he said. “I wouldn’t be surprised if in the next 12 to 24 months, we see a drawdown with respect to equity markets ... I think that there will be a lot of capital that’s deployed that will turn out to not deliver returns, and when that happens, people won’t feel good,” CNBC said quoting Solmon.

Global markets have been swept up in an AI-driven surge over the past few years, fueled by groundbreaking technologies, billion-dollar investments, and the rapid ascent of OpenAI, the developer behind ChatGPT. This enthusiasm has led investors to pour capital into tech giants like Microsoft, Alphabet, Palantir, and Nvidia.

The excitement surrounding artificial intelligence has helped propel major stock indexes to record highs, even as earlier setbacks, such as trade policy shifts under President Donald Trump, briefly weighed on US markets. 

“I’m not going to use the word bubble, because I don’t know, I don’t know what the path will be, but I do know people are out on the risk curve because they’re excited,” Solomon said as per CNBC.

“And when [investors are] excited, they tend to think about the good things that can go right, and they diminish the things you should be skeptical about that can go wrong ... There will be a reset, there will be a check at some point, there will be a drawdown. The extent of that will depend on how long this [bull run] goes,” he added.