Jan van Eck has warned that memory stocks look frothy, crypto faces a reckoning, and the spiraling US debt could spark a disaster.
The CEO of Van Eck — a global asset manager founded by his father, which now has about $225 billion under management — rang the alarm on the latest episode of “The Master Investor Podcast with Wilfred Frost.”
Memory stocks have surged during the AI boom thanks to insatiable demand for computing power. For example, Micron Technology and SK Hynix have more than tripled in value this year, and secured $1 trillion market capitalizations for the first time this week.
“One hates to call a top,” van Eck said, “but I personally am wary about the memory stocks because in the medium or long term they don’t have quite the competitive moat I believe that Nvidia does.”
The exchange-traded fund (ETF) pioneer said the run-up has been driven by demand far outstripping supply, pushing up prices for now.
“It feels bubblelicious,” he said, adding that his active fund managers are cutting their exposure to the memory space.
However, he said Nvidia should be able to fend off competition because it’s become “the kind of mainframe of AI” instead of a single-chip manufacturer. He also underscored the graphics-chip giant’s scale advantages, production efficiencies, and compelling valuation.
On a separate note, van Eck said a “crypto winter” has taken hold. While bitcoin, blockchain, and stablecoins have staying power in his view, “a lot of other parts of the ecosystem are just, to me, going away,” he said.
Bitcoin, the most popular token, has plunged from record highs of over $125,000 last fall to around $75,000.
The finance-industry veteran issued a grim caution about US government debt, which has nearly doubled since 2010 from about $20 trillion to north of $39 trillion.
He said a “loss of confidence” in America’s ability to service its debts would cause a meltdown in global markets.
“I don’t know if there’d be anywhere to hide,” he said, adding that even gold, a popular haven during periods of panic, would likely tumble.
“When everyone’s running for the exits, I don’t think anyone would be able to run any other direction,” he said.
