Billionaire investor Howard Marks, co-founder of Oaktree Capital Management, has spent more than five decades studying financial markets, investment risk, and speculative bubbles. His firm, founded in 1995, has grown into a global investment powerhouse managing more than $200 billion in assets. Marks is particularly famous for his expertise in distressed debt, but his reputation also rests on his ability to recognize dangerous levels of optimism in financial markets.
One of his most famous warnings came in January 2000, when he published a memo titled bubble.com, questioning the extraordinary valuations of internet and technology stocks. Just months later, the dot-com bubble burst.
Howard Marks Warns AI Stocks Could Repeat the Dot-Com Bubble
Marks now sees striking similarities between the artificial intelligence investment boom and the dot-com era. In an interview with investor and author William Green earlier in October, Marks said AI could transform the world without necessarily making investors wealthy. Billionaire Ken Fisher takes the other side. Click to see his 10 best AI stocks.
Green reminded Marks of his earlier warning that most companies investors were betting on to profit from AI could eventually become worthless. Marks acknowledged the characterization and explained:
“Change the world and investors making money are not the same thing.”
Marks believes AI could dramatically improve productivity, but he questions who will ultimately capture the profits. If AI companies compete aggressively, they may be forced to cut prices, reducing their margins. Similarly, businesses using AI could pass their cost savings on to consumers through lower prices rather than generating higher profits.
Today’s AI Winners May Not Dominate Tomorrow
Marks also warned that investors should not assume today’s dominant AI companies will remain the winners of tomorrow.
“You shouldn’t make the assumption that today’s leaders are certain to be the leaders of tomorrow.”
He cautioned against chasing smaller, speculative AI companies simply because established technology leaders appear expensive. He described this approach as a lottery-ticket mentality, warning that the possibility of enormous returns does not eliminate the significant risk of failure.
Another major concern is that the long-term economics of artificial intelligence remain uncertain. Companies are spending enormous sums on computing infrastructure, yet it is unclear how much revenue and profit these investments will ultimately generate.
“Exactly how the labor-saving tool of AI is going to turn into profits, I don’t think anybody can say.”
Microsoft is one of the companies investors want to see turn that spending into profit. Check the full Microsoft bull and bear case here.
Is the AI Stock Market Already in a Bubble?
Despite his warnings, Marks has stopped short of declaring that AI stocks are already in a full-blown bubble.
In an October 18 interview with Bloomberg, he acknowledged signs of excessive enthusiasm but argued that widespread discussion of bubble risks suggests investors have not become completely oblivious to potential losses.
You can also click the image below to watch our full video on the top 10 non-AI stock picks of billionaire Howard Marks.
Methodology
We scanned Howard Marks’ Oaktree Capital Management’s second-quarter 2026 13F filing and picked his 5 biggest non-AI stocks by the dollar value of the stake. We excluded TORM, Oaktree’s largest Q2 holding, because Brookfield took control of the company holding those shares in July 2026.
#10 YPF Sociedad Anónima (NYSE:YPF)
Oaktree Stake as of Q2: $45 Million
YPF is the largest energy company in Argentina. It is the biggest shale producer in the Vaca Muerta formation and runs refineries that handle more than half of the country’s refining capacity. Oaktree raised the stake by 12% in the second quarter. Morgan Stanley sees YPF as ready for shale growth. Read our coverage of the Morgan Stanley call here.
YPF Sociedad Anónima (NYSE:YPF) is Argentina’s largest energy company. It produces about 30% of the country’s oil and gas, and the Argentine government owns 51% of its shares.
Bulls believe YPF will keep growing because it leads Vaca Muerta, the world’s fourth-largest shale oil reserve, in Argentina. Shale oil output rose 47% from a year ago in the second quarter, and management targets 250,000 barrels a day by the end of 2026. YPF plans to run 19 drilling rigs by year-end. A new oil pipeline for exports is about 80% built, and YPF keeps a 36% stake in a planned LNG export project. Net debt fell to 1.1 times EBITDA, the lowest in over a decade. The stock trades at 6.78 times forward earnings, 45.39% below the sector median of 12.41, and at 4.44 times EV/EBITDA against a sector median of 7.70. Wall Street analysts rate it a Buy.
Bears point to Argentina. The government owns 51% of YPF, so its decisions can change YPF’s prices and plans. Argentine stocks fell for two days after Lula won Brazil’s election
#9 Kilroy Realty Corporation (NYSE:KRC)
Oaktree Stake as of Q2: $69 Million
Kilroy Realty owns and develops office and life science buildings in the San Francisco Bay Area, Los Angeles, San Diego, Seattle and Austin. Oaktree held the same number of shares as in the first quarter. Leopold Aschenbrenner’s Situational Awareness LP sold its Kilroy stake, and we laid out the bear case on West Coast office. Read the bear case here.
Kilroy Realty (NYSE:KRC) owns office and life science buildings in San Francisco, Los Angeles, San Diego, Seattle, and Austin. Oaktree held a $69 million stake at the end of the second quarter, 0.96% of its portfolio.
Bulls believe demand for West Coast office space is coming back. Tech, AI, and biotech companies are leasing again. Kilroy signed 815,000 square feet of leases in the third quarter, and 83.0% of its space is now leased. Only 76.9% is occupied, so 6.1% of its space has signed tenants who have not moved in or started paying rent. That rent starts when they move in, which lifts income without any new leasing.
Bears point to falling earnings. FFO per share dropped 18.5% from a year ago because of lower occupancy and higher interest costs on refinanced debt. Revenue also fell. Nearly a quarter of Kilroy’s space is empty, and its new Oyster Point Phase 2 campus is only 7% occupied. Debt is heavy at 7.5 times EBITDA. If AI funding slows, tech tenants may stop expanding.
#8 Freeport-McMoRan Inc. (NYSE:FCX)
Oaktree Stake as of Q2: $76 Million
Freeport-McMoRan is one of the world’s largest publicly traded copper producers. It also mines gold and molybdenum. Oaktree trimmed the stake by 2% in the second quarter. Rising copper prices and higher production are running into tariff uncertainty and rising project costs. See if copper can outrun the costs here.
Freeport-McMoRan (NYSE:FCX) shares have lagged the performance of copper because the company is selling less copper than last year. Its Grasberg mine in Indonesia is still rebuilding output after an accident, so Freeport cannot fully benefit from higher copper prices. The mine ran at 67% of capacity in the third quarter. Management expects 80% by mid-2027 and near full capacity by the end of 2027, and it expects copper sales to grow more than 20% in 2027. Bulls believe the stock will catch up as that output returns. Third-quarter results beat estimates.
Bears worry the recovery keeps slipping. Management cut its 2026 copper sales forecast by about 2% and its 2027 forecast by about 2.5%, because mines in the US and Chile produced less than planned. Freeport has pushed back its Grasberg schedule before. Energy costs are rising, which raises the cost of mining copper. Freeport owns only about half of some of its biggest mines, so partners, including Indonesian state owners at Grasberg, take a share of the profit.
#7 Viasat, Inc. (NASDAQ:VSAT)
Oaktree Stake as of Q2: $57 Million
Viasat (NASDAQ:VSAT) sells satellite internet and secure communications to airlines, ships, and governments. Oaktree opened a new position in the second quarter worth $57 million, 0.79% of its portfolio.
Bulls like Equatys, a satellite venture Viasat is forming with the UAE company Space42. Phone carriers would share its satellites to reach phones outside cell coverage, much like carriers share cell towers. Viasat is expected to build the network, so it could earn construction revenue and still own part of the venture.
#6 Itaú Unibanco Holding S.A. (NYSE:ITUB)
Oaktree Stake as of Q2: $98 Million
Itaú Unibanco is one of the largest banks in Brazil. Oaktree trimmed the stake by 2% in the second quarter. Our earlier coverage showed the bank hitting a record 23.4% return on equity. See how the bank got there.
Itaú Unibanco (NYSE:ITUB) shares fell after Lula won re-election in Brazil, but bulls believe the stock can recover. They point to the bank’s numbers. Return on equity, which shows how much profit the bank earns on shareholder money, was 24.3% in the second quarter. Loans overdue by more than 90 days stayed at 1.9% for six straight quarters while the loan book grew 9.6% from a year earlier.
The stock trades at about 2 times book value, near the low end of its 2026 range of 1.8 to 2.8 times, and at 8.64 times forward earnings. It yields about 7%. If Itaú Unibanco keeps earning around 24% on equity, the price has room to recover.
#5 Viper Energy, Inc. (NASDAQ:VNOM)
Oaktree Stake as of Q2: $161 Million
Viper Energy owns mineral and royalty interests in oil and gas land in the Permian Basin. It collects a share of the revenue without drilling the wells. Oaktree held the same number of shares as in the first quarter. Viper also rewrote how it pays shareholders after its second-quarter results. Check the payout details here.
Viper Energy (NASDAQ:VNOM), a subsidiary of Diamondback Energy, owns royalty rights on oil and gas land in the Permian Basin. Drillers pay for the wells and Viper collects a share of the revenue, so most of each sale becomes cash. Production beat the top of its forecast by 7%, and management expects about 4.5% more output in the third quarter. The base dividend rose 32% to $2 a year, and the company says it is protected down to about $30 oil.
The stock trades at 17.12 times forward earnings, 37.94% above the sector median of 12.41. Cash swings with oil. A rise of about $25 a barrel from the first to the second quarter lifted cash available for payouts about 30%, and a drop would hit it just as hard. Viper does not control drilling, and operators can slow down when prices fall.
#4 Telephone and Data Systems, Inc. (NYSE:TDS)
Oaktree Stake as of Q2: $196 Million
Telephone and Data Systems provides broadband and fiber internet through TDS Telecom. It also owns about 82% of Array Digital Infrastructure, a cell tower company. Oaktree raised the stake by 24% in the second quarter. Middle Coast Investing covered TDS’s move to fiber and the value in Array Digital in its second-quarter 2026 letter. Read the full letter here.
Telephone and Data Systems (NYSE:TDS) is down about 10% over the past year. TDS owns TDS Telecom, a fiber, cable, and copper internet provider, and about 80% of Array Digital Infrastructure, a cell tower company. In the second quarter, TDS Telecom’s revenue fell 6%, capital spending nearly doubled, and management cut its revenue forecast. Copper and cable customers leave faster than fiber customers sign up. The earnings beat came mostly from one-time spectrum sale gains, so investors ignored it.
TDS holds far more cash than debt to fund its fiber build. Fiber additions rose 47% in the second quarter, and rivals struggle to win customers from a finished fiber network. Array has fewer than one tenant per tower, so adding tenants is cheap. TDS dropped its Array offer in September and plans to restart buybacks. If fiber customers keep growing and Array fills more of its towers, both businesses can earn more for years.
#3 AngloGold Ashanti plc (NYSE:AU)
Oaktree Stake as of Q2: $257 Million
AngloGold Ashanti mines gold in Africa, Australia and the Americas. Oaktree trimmed the stake by 2% in the second quarter. AngloGold Ashanti also appears in our list of the 10 best gold mining stocks to buy as central banks buy bullion. See the full list here.
AngloGold Ashanti (NYSE:AU) mines gold in Africa and several other regions, and it is developing new projects in Nevada. The company pays out 50% of its annual free cash flow as dividends. The dividend rises and falls with gold prices, and the first-half dividend was about double the year before. The stock yields 5.31%.
Production should rise through the rest of the year. Management kept its full-year guidance and expects most of the output in the second half, mainly the fourth quarter. More ounces from the same mines should bring the cost per ounce down. The market charges a discount for African mines, and the Nevada projects would add US output over time.
The stock trades at 10.12 times forward earnings. That is 32.71% below the sector median of 15.04 and 15.91% below its own five-year average of 12.03. On EV/EBITDA it trades at 6.17 times against a sector median of 9.40. If gold holds up, AngloGold Ashanti has room to close that gap.
#2 Garrett Motion Inc. (NASDAQ:GTX)
Oaktree Stake as of Q2: $275 Million
Garrett Motion makes turbochargers for car and truck engines. Oaktree cut the stake by 48% in the second quarter. Harbor Mid Cap Value Fund named Garrett Motion among its top contributors in the second quarter. Click to read the full letter.
Garrett Motion (NASDAQ:GTX) makes turbochargers. A turbocharger is a small air pump that uses engine exhaust to push extra air into an engine, so the engine makes more power from less fuel. Its Q3 revenue increased about 3% but fell slightly short of Wall Street’s expectations, while earnings beat estimates. Growth in commercial vehicles, industrial applications, and aftermarket products helped offset weakness in the passenger vehicle market.
It trades at 10.53 times forward earnings, 31.09% below the sector median of 15.29. Forward EV/EBITDA, which compares total company value with operating earnings, is 7.57 against a sector median of 9.48.
#1 Expand Energy Corporation (NASDAQ:EXE)
Oaktree Stake as of Q2: $478 Million
Expand Energy is one of the largest natural gas producers in the United States. Oaktree held the same number of shares as in the first quarter. Sycamore Capital said in its second-quarter 2026 letter that a lower capex outlook and a leadership change weighed on the stock. Check the full letter here. Our latest coverage asks whether its growth story is at risk. Click to read our latest take.
New LNG plants are being built on the Gulf Coast. LNG is natural gas cooled into a liquid so ships can carry it to other countries. Expand’s Haynesville wells in Louisiana and East Texas sit close to these plants. Short trips to the buyer keep shipping costs low, and Haynesville gas sells at a price closer to the benchmark than Appalachian gas does.
The stock trades at 10.58 times forward earnings. The sector median is 12.50, and Expand’s own five-year average is 23.38. Analyst consensus rates the stock a Buy. If the LNG plants buy gas on schedule, Expand Energy (NASDAQ:EXE) has room to close that gap.
While we acknowledge the risk and potential of EXE as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than EXE that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock.
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