IMF Monitors AI Stock Volatility Amid Valuation and Debt Risks

The IMF says it is monitoring volatility in AI stocks but considers it too early to determine whether investors are turning away from the sector over the long term. The fund continues to warn that AI valuations could be reassessed if the technology fails to deliver lasting profitability, and its October financial stability report highlighted elevated valuations and rising debt as risks. It also noted that major cloud providers’ share of global investment-grade bond issuance rose to 10%, from less than 1% in 2024. The IMF is also watching whether political and permitting changes in the United States could slow data-center construction and AI investment.