I’ve been fearing another stock market crash for the last six months. However, stocks have kept pushing up from their Trump-inspired ‘Liberation Day’ lows and — in the US and UK — are now at all time highs.
So I’ve turned to artificial intelligence (AI) to help me discover when the next stock market crash may occur. Sadly, the answer wasn’t overly illuminating. But it did reinforce some home truths.
Unsurprisingly, ChatGPT didn’t have the answer, but it did say: “There is no reliable way to say when the next stock-market crash will happen — only which economic and market signals make one more likely. As of early October 2025, valuations and leverage are high while a number of macro indicators are signalling elevated risk.”
Clearly, there are some important themes here, even though it didn’t have the desired answer to my question. Everything in investing should be based on probability-weighted outcomes. In other words, how likely something is to occur based on data and market signals.
Now, as ChatGPT highlights (and I already knew), stocks are more expensive versus their earnings power than they have been in recent years. But it’s a sliding scale. Some stocks, like Palantir and other AI newcomers have valuations that are very hard to justify. Other parts of the market look quite cheap.
This year global equities have continued to climb the proverbial ‘wall of worry’. Markets have shrugged off potential shocks like trade tensions and tariff threats, and ongoing conflicts.
In the US, a government shutdown has added another layer of uncertainty, while in Europe, political instability has grown. Gold has also seen its biggest rally since the 1970s.
Yet despite this backdrop, investors remain focused on resilient corporate earnings, moderating inflation, and the growing conviction that interest rates will fall further.
This, of course, creates an even more dangerous situation. It may encourage investors to overlook mounting risks and push prices ever higher, stretching valuations to unsustainable levels.
When markets rise in spite of worsening fundamentals, sentiment rather than earnings becomes the main driver. That can reverse abruptly.
I’ve had a lot of success investing in AI stocks. However, mine are now increasingly non-AI focused in this environment. One of which is the London Stock Exchange Group (LSE:LSEG). For me, it remains one of the FTSE 100’s most appealing long-term opportunities, based on its current valuation.
Despite the share price sliding roughly 21% year to date, revenue continues to expand with net sales expanding across the company’s four main segment.