Economists flag AI stock froth, warn of crypto slide and weaker dollar: WEF report

The World Economic Forum’s latest Chief Economists’ Outlook shows improving confidence in the global economy, even as a majority of economists warn that stretched AI-led asset valuations pose growing spillover risks.

The quarterly report is based on 36 survey responses collected between November 19 and December 3, 2025, drawing views from leading chief economists across the public and private sectors.

The findings will frame discussions at the World Economic Forum’s 56th Annual Meeting, scheduled to take place in Davos-Klosters, Switzerland, from 19-23 January 2026.

AI and asset valuations under scrutiny

One of the report’s sharpest fault lines is around AI-linked asset valuations. Stock market gains have been heavily concentrated in a small group of US technology firms, with the so-called “Magnificent Seven” now accounting for around 35% of total index market capitalisation, up from 20% in November 2022. Valuations of these firms have climbed into the top 10% of their historical distributions, heightening concerns over concentration risks.

Chief economists are divided on the outlook for AI-related equities, particularly in the United States. While 52% expect US AI-linked stocks to decline over the next year, 40% foresee further gains, highlighting the uncertainty surrounding pricing and long-term returns. Importantly, 74% of respondents believe that a sharp fall in AI valuations would have spillover effects across the global economy.

Views on Chinese AI stocks are more optimistic, with 68% expecting prices to rise, compared with 24% who anticipate declines.

Asset class outlook: Survey snapshot

Asset class	Expect increase	Expect decrease	No change
US AI stocks	40%	52%	9%
China AI stocks	68%	24%	9%
Gold	46%	31%	23%
Cryptocurrencies	18%	62%	21%
US dollar	20%	54%	26%

Crypto and gold

Cryptocurrencies face the bleakest outlook among major asset classes. Nearly two-thirds (62%) of chief economists expect crypto prices to decline further, following recent market turbulence. In contrast, sentiment on gold is more mixed, with 46% expecting prices to rise, while 31% believe gold has already peaked after recent rallies.

A majority of respondents also expect the US dollar to weaken, reflecting concerns around fiscal pressures and shifting global capital flows.

AI productivity gains still expected

Despite valuation concerns, chief economists remain broadly optimistic about AI-driven productivity gains. Around four in five respondents expect meaningful productivity improvements within two years in both the US and China.

The information technology sector is seen as the fastest adopter, with nearly three-quarters of economists expecting near-term productivity gains. Financial services, supply chains, healthcare, engineering and retail are also viewed as fast movers, with one-to-two-year adoption timelines.

By company size, large firms with over 1,000 employees are expected to benefit sooner, with 77% of chief economists anticipating meaningful gains within two years, underscoring concerns that AI-driven growth may initially be uneven.