If you think the market looks frothy right now, you're not alone. Albert Edwards, Global Strategist at Société Générale, isn't just worried about a correction—he's warning that we're watching a bubble inflate that could make 2008 look tame by comparison.

The Bubble That Nobody Wants To Acknowledge

Edwards has never been one to sugarcoat his views, and he's drawing direct comparisons between today's market and the dot-com disaster of the late 1990s. In a recent interview with Fortune, he pointed to tech companies trading at over 30 times forward earnings as exhibit A in his bubble case. Those aren't just elevated valuations—they're screaming red flags, according to Edwards.

But here's where things get interesting. Edwards argues this bubble is actually more precarious than previous ones because of how narrowly concentrated the risk has become. The economy isn't just betting on tech—it's betting specifically on AI, and that theme is driving both corporate investment decisions and consumer spending patterns. Making matters worse, consumer spending is leaning heavily on the wealthiest Americans, creating a house of cards built on a very small foundation.

Edwards has a mixed track record—he nailed the dot-com bubble but has also cried wolf when no wolf appeared. Still, he's not backing down. The U.S. hasn't seen a recession since 2008, and that unprecedented stretch of growth hasn't calmed his nerves. If anything, it's made him more concerned.

"Generally, when you're gripped by a bubble, people just don't want to listen because they're making so much money," Edwards said.

Market Weakness Reflects Growing AI Anxiety

Edwards isn't shouting into the void anymore. Investor and author Ruchir Sharma recently echoed similar concerns, suggesting the economy's dependence on AI could lead to an abrupt bubble burst.

The market is already showing cracks. Over the past five trading days, the S&P 500 slipped 1.65% while NASDAQ fell 2.26%, driven by a tech sell-off. What's remarkable is that this happened despite Nvidia Corp. (NVDA) posting blockbuster earnings—a sign that investors are getting jittery about AI valuations regardless of strong fundamentals. Nvidia's stock dropped 3.90% during that period, and CEO Jensen Huang reportedly expressed his frustration with the market's underwhelming response.

Not everyone is convinced we're in bubble territory, though. Bill Gates has acknowledged there's some AI froth but argues it's not on par with historical bubbles. Meanwhile, Wedbush analyst Dan Ives pushed back hard against the bubble narrative, stating, "This is not an AI Bubble and Nvidia's blowout quarter and bullish demand commentary around Blackwell/Rubin is what we focus on despite this sell-off."

The debate will continue, but one thing is clear: the market is wrestling with whether AI can justify the astronomical valuations it's commanding, and the answer to that question will determine whether Edwards is vindicated or simply remembered as the strategist who cried bubble once too often.