Hey all,

Right now, the big question I see everywhere is: are we in an AI bubble? And seems like a lot of people are saying that 2026 is the year the crash happens. I want to clarify something. I strongly believe that 2026 is the year of the peak of the market, not when the crash actually happens. And right now, I do think we are in the final phase of that peak.

Now if you’re new here, I’m Ace. I study markets and patterns. I pay attention to what companies and banks are doing because money and borrowing shape the world. When lots of people get excited about one idea—like AI—prices can climb a lot, fast. That feels good for a while, but big drops can hurt a lot too. My goal is to help you see the signs, understand the risks, and act wisely. If you’re young or just starting, the best thing you can do is learn how bubbles form and how to protect your money.

Right now, AI spending by big tech companies has grown so fast it now adds more to the economy than consumer spending in 2025. That is a big deal.

Because of this people in tech and finance worry this could be a bubble. And they are right. Where we are right now is very similar to the 1999 Internet Bubble.

Companies back then had huge hopes but many could not meet those hopes. The market crashed, wiping out lots of value. We can see similarities in terms of PE ratio of Cisco vs Palantir now (Cisco was up to 200 PE ratio and Palantir is 400).

Let’s look at 3 important forces that currently drive and push our current bubble higher so we can know where we are at the moment (I picked this up from Bravos Research):

When people tell a strong story — "AI will change everything and make companies tons of money" — other people start believing it. That story becomes the reason to buy stocks.

And when you look at AI current state, AI adoption is at about 9.2% and rising, which supports the story. If adoption keeps growing fast, the story can stay true longer. If adoption slows, the story weakens and prices can fall fast.

If there is a lot of cash and cheap borrowing, investors keep buying. And that has been true in the last 1 year with all the rate cuts. Lower interest rates and rate cuts often mean more money chases hot trends. That helps bubbles grow. If central banks start raising rates instead, the extra money dries up and bubbles can pop.

Be cautious here. Multiple crashes in the past have seen these rate cuts eventually followed by a rate increase and then a crash. And most of the signs are telling us we are very close.

People join trades because they see big returns. When prices keep climbing, more people pile in. However, the momentum is often wrong when we are near the peak of the real estate market. This was true in 1929, 1990, 1999, 2008 and it won’t be any different in 2026/2027.

I watch for these red flags when something might be a bubble:

If I see these, I become cautious. And right now, many of these signs are showing for AI right now, so caution is sensible.

And when I look at an AI bubble, I also think about where housing stands on its 18-ish year clock. When housing is near a peak like we are now, the system is more fragile. An AI stock shock could lead to deep economic pain.

If you keep learning, use a simple checklist, and stick to rules, you can protect your money and find opportunities even when markets get wild. I’m watching the same signals I described here, stocking up cash and I adjust my actions based on the three drivers: narrative, liquidity, and momentum — plus the long real estate cycle. That’s how I try to stay ahead and safe.

Keep scrolling down for the checklist and tools I use.

If you find this article interesting, please let us know your thoughts down below here. We also have have other similar articles on our website too.

Sharing with you the tools I’m using at the moment.

📚 Books I read: https://linktr.ee/smartxcapital

I’m building something for investors who want to move smarter — not faster.

A place where we’ll track these cycles together, share real-time insights, and learn how to invest with the cycle — not against it. I’ll be offering workshops, tutorials, and in-depth guides to help you build a timeless investing system that grows through every boom and bust.

📚 The Smart X Capital Platform is coming soon — a place to learn, connect, and stay ahead of every major market cycle using data, history, discipline and our community.

If you’ve been following my emails and you want to be ready for 2026, now’s your moment.

👉 Join the Smart X Capital Platform Waitlist

Because when every major cycle converges — the prepared don’t panic. They profit.

Talk soon,

Ace — Smart X Capital’s Founder