Investors always listen closely to comments from Warren Buffett — and for good reason. The billionaire spent six decades at the helm of Berkshire Hathaway, and there, he drove market-beating gains. He helped Berkshire Hathaway deliver an average annual return of more than 19%, compared with the S&P 500’s 10% over that period.
That’s concrete proof of Buffett’s clear understanding of the market, and investors, realizing this, aim to benefit from his wisdom. Buffett has been generous when it comes to sharing his thoughts on investing and secrets to success, and he’s done this through his letters to shareholders, talks at events, and press interviews.
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Today, Buffett no longer leads Berkshire Hathaway’s investing decisions. He recently retired and now holds the position of chairman emeritus and a spot on the board of directors. However, Buffett remains involved in the Berkshire Hathaway investment process and also continues to share his thoughts with the public.
In fact, Buffett is sending shockwaves through Wall Street with the following warning, and history says this may happen next.
Image source: The Motley Fool. Image source: The Motley Fool.
A 78% gain over three years
First, let’s consider the S&P 500‘s path so far in 2026, after completing a 78% gain over three years. As the artificial intelligence (AI) boom gained momentum, investors turned to stocks operating in this space — and since many are tech giants, heavily weighted in the S&P 500, they helped push the index significantly higher. Meanwhile, against the backdrop of interest rate cuts in 2024 and 2025, investors also favored other growth stocks, as they benefit in such environments.
This year, the S&P 500 has pulled back on occasion as investors worried about several headwinds, from rising inflation to the possibility that the AI revenue opportunity wouldn’t be as significant as expected. Still, declines have been short-lived, and the index has continued to march higher, even closing at a record this week. And certain AI stocks have delivered mind-boggling gains — for example, AI memory providers Sandisk Corp. and Micron Technology have climbed more than 600% and 200%, respectively, since the start of January.
Now, let’s consider the Warren Buffett warning that’s sending shockwaves through Wall Street. Speaking with CNBC during the Berkshire Hathaway shareholders’ meeting in May, Buffett expressed concern about a high level of “gambling” in the stock market.
