Warning of AI Potentially Triggering Economic Collapse
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 24 2026
0mins
Should l Buy ARES?
Source: Benzinga
- Market Reaction: A research note from Citrini Research warning that AI could trigger an economic collapse led to a nearly 5% drop in software stocks tracked by the iShares Tech-Expanded Software Sector ETF (NYSE:IGV) on Monday, reflecting investor anxiety about future economic conditions.
- Rising Unemployment Expectations: The report hypothesizes that unemployment could exceed 10% by 2028, with the S&P 500 potentially falling nearly 40% from previous highs, indicating a significant impact on the spending power of high-income professionals who drive discretionary consumption.
- Yardeni's Rebuttal: Veteran Wall Street strategist Ed Yardeni counters this pessimistic narrative by asserting that AI enhances productivity rather than eliminating jobs, maintaining his long-term bullish outlook with a projection of the S&P 500 reaching 10,000 by 2030, suggesting confidence in future market performance.
- AI's Double-Edged Sword Effect: Citrini Research raises concerns about AI undermining SaaS companies' pricing power and impacting consumer spending, while Yardeni emphasizes that technological innovation typically reallocates labor rather than eliminates it, highlighting the significance of this debate for the future economic landscape.
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Analyst Views on ARES
Wall Street analysts forecast ARES stock price to rise
10 Analyst Rating
8 Buy
2 Hold
0 Sell
Strong Buy
Current: 113.360
Low
155.00
Averages
191.40
High
223.00
Current: 113.360
Low
155.00
Averages
191.40
High
223.00
About ARES
Ares Management Corporation is an alternative investment manager offering clients complementary primary and secondary investment solutions across various asset classes. Its segments include Credit Group, Private Equity Group, Real Assets Group, Secondaries Group, and Other. The Credit Group segment manages credit strategies across the liquid and illiquid spectrum, including liquid credit, alternative credit, direct lending and APAC credit. The Private Equity Group segment categorizes its investment strategies as corporate private equity, special opportunities and APAC private equity. The Real Assets Group segment manages comprehensive equity and debt strategies across real estate and infrastructure investments. The Secondaries Group segment invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate, infrastructure and credit. It has operations across North America, South America, Europe, Asia Pacific and the Middle East.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Loan Quality Defense: Blackstone President Jon Gray highlighted that over 400 borrowers in BCRED achieved 10% EBITDA growth last year, expressing optimism about loan quality despite the bearish market sentiment, which he believes will help stabilize investor confidence.
- Market Reaction Analysis: Although Blackstone's measures to allow investor redemptions aimed to address liquidity needs, this move did not alleviate market tensions but instead sparked broader concerns about the private credit sector, particularly regarding loans in the software industry.
- Fund Performance Data: BCRED has delivered an annualized return of 9.8% since inception for Class I shares, with a Blackstone spokesperson emphasizing the firm's commitment to meeting redemption requests, showcasing confidence in the fund and alignment with investors.
See More
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See More
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- Market Resilience: Despite the geopolitical tensions following the U.S. and Israel's attacks on Iran, the S&P 500 managed to close slightly higher on Monday, indicating a relatively muted market response to the conflict and reflecting investor optimism about economic prospects.
- Impact of Energy Independence: Jim Cramer noted that U.S. energy independence has altered how investors react to geopolitical shocks, as the abundance of domestic oil production diminishes the impact of global oil price fluctuations on the U.S. economy.
- Oil Price Volatility: During Monday's session, West Texas Intermediate crude surged over 12.4% at its peak, settling at $71.23 per barrel, although it could not maintain those highs, highlighting the market's sensitivity to oil price movements.
- Market Sentiment: Investors appeared unfazed by the steep declines in private equity firms like KKR, Blackstone, and Apollo, despite concerns in the software sector, suggesting a calm market attitude towards geopolitical turmoil and indicating that economic panic is not necessarily a consequence of such events.
See More
