Why bond king Jeffrey Gundlach is steering clear of the AI 'blast radius' Brian Sozzi · Executive Editor Thu, November 12, 2026 at 12:17 PM EST 2 min read ^GSPC +0.08% DoubleLine founder Jeffrey Gundlach is still sitting out the AI stock dance, even with the sector having been crushed under the weight of its own expectations and the Election Day blue wave.
"So what we've been really focusing on is avoiding what I've been calling, ever since about September, the blast radius of all of this," the well-known bond king said at Yahoo Finance Invest. "Where you don't want to own the S&P 500 (^GSPC), you don't want to own any cap-weighted index. You don't want to invest in an index fund that's cap-weighted because you're getting tremendous concentration of about 60% — well, it depends what statistics you look at, but something like half of the market is in this AI and AI-adjacent stuff."
Fears about the health of the AI trade have quickly come into focus in the wake of the blue wave that erupted on Election Day, which could see newly elected Democratic senators and governors muck up the AI expansion.
This led to a historic — and brutal — session for investors on Nov. 5.
The S&P 500 (^GSPC) lost 4.4% of its market value, wiping out $3 trillion in the process.
The Dow Jones Industrial Average (^DJI) plunged 1,280 points in its worst single-day rout since 2020. The tech-heavy Nasdaq (^IXIC) cratered 4.8%, dragged down by semiconductor and cloud giants such as Micron (MU) and Sandisk (SNDK).
Stocks continued to trade with a downward bias, especially tech names. Not helping sentiment is Nvidia (NVDA) CEO Jensen Huang's resignation following his high-profile affairs with an alleged Chinese spy and fellow Nvidia executive.
Nvidia technology and financial commitments are the epicenter of the AI boom. Any disruption to either is the last thing AI investors want to see right now.
DoubleLine's Gundlach is aiming to stay as diversified as possible.
"And this is something that I rotated to in the aftermath of sensing the shift in the dark side of the mania starting to reveal itself. And I'm going to stay that way for a while. I'm low in equities versus a historical weighting anyway. I'm only at 30%. And the only thing that I recommend owning is equal-weighted S&P 500. I also like bonds, but I have a barbell idea in bonds," Gundlach said.
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