The legendary fund manager has a surprising stance on artificial intelligence

AI continues to rewrite the rules, and its pace is not slowing down anytime soon.

So far this year, AI trading has generated nearly $4.3 trillion in new market value across a narrow group of leaders.

The name that dominates is clearly Nvidia (NVDA) which is worth about $4.5 trillion, and represents 7% of the total S&P 500 index by index weight.

Moreover, Wall Street spending accounts show that the AI ​​hype train is not slowing down anytime soon.

Bank of America expects investment in artificial intelligence to grow More than $1.2 trillion Annually by 2030, as hyperscalers, enterprises, and governments build compute, power, and networks. Goldman has set the early ramp near the $200 billion mark by 2025.

Hence, the setup seems straightforward, with the number of winners rising, capital expenditures rising, and the market leaning heavily towards one theme. This is where experienced investors look for a different lens.

Cue Peter Lynch, perhaps one of the most influential fund managers in the modern market. He has a fresh and unexpected look at today’s AI boom, so before you follow the next big title, you might want to hear how he frames the risk and opportunity.

Peter Lynch offers an unexpected look at the powerful AI boomSteve Lees/Getty Images

Legendary fund manager Peter Lynch has seen many ups and downs in the market over the past several years, and he’s not jumping into this one.

The former head of Fidelity Magellan Fund, which averaged an annual return of nearly 30% during his 13-year tenure that ended in 1990, said he would step away from AI trading altogether.

“I don’t have any stock of AI,” Lynch said. The complex and friends Podcast. “I literally couldn’t pronounce Nvidia until about eight months ago.”

Related: Veteran Analyst Drops 3-Word Verdict on AMD and OpenAI Deal

Although Mr. Market continues to debate whether the AI ​​boom is the next dot-com bubble, Lynch’s message is that discipline always trumps prediction.

He took the opportunity to remind his listeners of his bedrock principle of “Know What You Own.”

Too many investors, he said, “put $10,000 into a stock they heard on the bus,” without understanding its business, which is something it’s best to avoid guessing.

The fund manager buys and sells

He feels that modern investors have “a lot of better things,” from unemployment insurance and Social Security to the Federal Reserve acting as a stabilizing factor.

He doesn’t dismiss the enormous potential of AI, but it is an admission that he doesn’t understand it well enough to bet on it. In a market obsessed with the big thing in AI, a lesson from one investment giant is incredibly relevant.

• Own what you understand, not what’s trending.

• Lynch has no exposure to AI by choice.

• He feels that investors today have more protection and information than ever before.

• Discipline and simplicity still drive long-term success.

The “AI bubble” debate has clearly transcended social media, and some of the biggest names on Wall Street see history repeating, while others say it has only just begun.

The bears are going crazy late in the cycle, which is confirmed by runaway valuations, circular financing, and capital spending that is accelerating ahead of earnings.

James Anderson, a longtime technology investor and fund manager, compares the OpenAI funding loop, for example, to the vendor funding vortex that devastated the telecom space in 2000.

RELATED: Palantir Just Walked Away from a Billion-Dollar Battle

Bill Gross warns of “misinvestment” as technology companies invest billions in data centers with no clear payback. Jeremy Grantham calls this the “gold rush” phase of innovation, which is always overrated before winners emerge.

Major banks straddle the two camps.

JPMorgan expects there will be capital expenditure for artificial intelligence$450 billion in 2025which is enough to move the GDP. Bank of America believes this number could triple to $1.2 trillion by 2030, despite the financial bottleneck. Spending on data centers in the United States also reached a record run rate of $40 billion, confirming the story of an arms race in the field of artificial intelligence.

Top industry executives liken it to a platform shift, not a bubble. Sam Altman admits that artificial intelligence is just that “in a bubble” But the kind that “creates lasting progress.”

Mark Zuckerberg, CEO of Meta Platform, says lack of investment is the biggest mistake. AMD’s Lisa Su says this is “the beginning” of the AI ​​cycle, while Nvidia’s Jensen Huang feels the payoff will last for decades.

RELATED: Cathie Wood is spending millions on the 26-year-old tech giant

This story was originally reported by The Street On October 8, 2025, he made his first appearance in Technology business news to divide. Add TheStreet as Favorite source by clicking here.