AI Stocks Could Crash in 2027: 3 Ways to Protect Money

TL;DR: Yahoo Finance reported on October 22 that a BloFin Research team sees a possible AI stock crash in 2027 and suggests three moves: shift toward equal-weight funds like RSP, put some profits into Treasuries, and consider Bitcoin. Nvidia alone is nearly 8% of the SPY fund, so check your own index exposure.

The warning lands in a jumpy week. CNBC reported that the S&P 500 fell nearly 2% last week, its biggest weekly decline since late June, while the Nasdaq Composite tumbled 4.5%. A BloFin forecast is an opinion, and nobody in these sources claims to know when or whether a crash happens.

For an accredited investor, the stakes reach past the stock account. If you hold private funds alongside public shares, a sharp drop in AI names can change how easily you get money out of those funds. The redemption gates in many pooled funds can cap withdrawals just when more investors ask for them.

Why does an AI crash matter if you own an index fund?

Because an index fund may hold more AI exposure than its label suggests. According to the Yahoo Finance report, Nvidia accounts for nearly 8% of the SPY fund, and the ten largest holdings make up roughly 39% of it. If you bought a broad fund to avoid betting on one theme, look at how much of it now rides on a handful of names.

The risk is also in how the money flows. Economist Dario Perkins of TS Lombard argues, per Business Insider, that much of the industry's revenue growth still comes from companies spending on each other rather than from businesses and consumers paying for AI services. He estimates that debt across parts of the AI industry could reach $2 trillion by the end of 2027. That figure is his own estimate.

What are the three strategies, and what does each one cost you?

Each hedge trades one risk for another. The table sets out what the Yahoo Finance report proposes and the main thing to weigh against it.

Strategy	What it does	What to weigh
Equal-weight funds such as RSP	Gives each S&P 500 company roughly 0.2% weight at rebalancing, so no single stock dominates	Still all U.S. large-cap stocks, so a broad selloff hits it too
Treasuries	Moves some AI gains into government debt that pays interest	Caps your upside if AI stocks keep climbing
Bitcoin	Adds an asset BloFin expects to grow on crypto adoption	Highly volatile: the same report says it plunged more than 53% from its October 2025 peak to June 2026

The first two are ordinary portfolio moves. Bitcoin is a different animal. The report calls it a growth opportunity, which means it is a bet that carries its own crash risk, and a market panic that hits AI shares can hit it as well. Anyone calling it protection should have to explain that 53% drop first.

Does everyone see a crash coming?

No. Ben Kumar of 7IM told The Sun he is "not too worried about the big market moves being a sign of the AI bubble bursting". CNBC's Jim Cramer argued the recent selloff carries a 1987 lesson: a stock can fall because its business is weakening or because of forces beyond the company's control, and those are different situations.

When well-informed people disagree this openly, a single forecast deserves a low weight in your decisions.

What should a private-markets investor take from this?

Owning private assets does not remove public-market risk. It adds a different one, which is liquidity. Our pieces on redemption gates and the private credit market explain how access to your cash can shrink when you want it most.

The angel and venture side has its own version. A drawdown in AI valuations feeds into later-round pricing, which is one reason portfolio size matters, as covered in why an angel portfolio can be a coin flip.

Common mistakes

The most common one is treating a forecast as a schedule. A research team saying 2027 does not make 2027 the date. Selling everything early has its own cost, because the same Yahoo Finance report notes the Nasdaq nearly quadrupled before it crashed.

The second is confusing a hedge with a safe harbor. Equal-weight funds still fall in a broad selloff, and Bitcoin can fall with them. The third is ignoring taxes. Selling winners to rebalance can create a bill, so talk to a tax professional before you move anything.

FAQ

What stocks will go up if AI crashes? No source here names a sure winner. The Yahoo Finance report points to Treasuries and equal-weight funds as places to shift exposure. These are ideas that have been suggested, and none is guaranteed to hold up.

Is a market crash coming? None of the sources can say. BloFin Research calls a 2027 crash possible, while 7IM's Ben Kumar says he is not too worried about the recent moves. Treat both as opinions and look at your own exposure.

Where should I put my money before the stock market crashes? That depends on your situation, so it is a question for a qualified adviser. The report suggests reducing concentration in a few large AI names and holding some Treasuries. Neither removes risk.

What will trigger the AI crash? The sources point to different triggers. Perkins of TS Lombard cites debt across parts of the AI industry and revenue that may be simple capex recycling. Business Insider also reports investors questioning whether massive AI spending will deliver sufficient returns.

What to do today

Open your largest fund and read its top ten holdings. If a few AI names make up a large share, you now know how much of your portfolio depends on one theme. The free AIN briefing tracks stories like this each week, so you can see how public-market swings reach private holdings.

Educational content only. Not investment, tax, or legal advice. Not an offer or solicitation to buy or sell securities. Past performance does not guarantee future results. Private-market investments are illiquid and involve risk of loss, including total loss of capital. Consult qualified advisers. Angel Investors Network is not a broker-dealer or investment adviser.