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# The RBA's extraordinary warning about AI share prices
- URL: https://www.benchmarkanalytics.com.au/the-rbas-extraordinary-warning-about-ai-share-prices/
- Published: 2026-11-01T20:00:00.000Z
- Updated: 2026-11-01T20:00:00.000Z
- Author: Nick Hossack
- Tags: Artificial Intelligence, Technology Investment, RBA, Brad Jones, #superannuation

How much future profit growth is already reflected in soaring US technology share prices?

Speaking on 26 October, Reserve Bank Assistant Governor Brad Jones warned that, until recently, market valuations implied approximately **45% annual earnings growth for the US information technology sector indefinitely, beyond the next three years**.

The arithmetic is extraordinary. A company earning $10 billion today would earn **$411 billion in ten years** if profits compounded at 45% annually.

Jones also warned about increasing debt financing, complex funding arrangements and the concentration of sharemarket value in a handful of technology companies.

This matters for Australian superannuation funds, which invest heavily in international equities, including US technology stocks.

If AI profits disappoint, share prices could fall sharply, reducing members' retirement savings.

The RBA is not questioning AI's technological potential. Its concern is whether investors have already priced in unrealistic financial returns.

**A technological revolution does not guarantee an investment revolution.**

AI valuations: The extraordinary growth assumption

RBA Assistant Governor Brad Jones | 26 October 2026

45% a year

Earnings growth implied by US technology valuations, according to Jones

Beyond the next three years, continuing indefinitely. The underlying valuation model was not published.

The mathematics of 45% compound growth

Illustration: company earnings begin at $10 billion annually

| Today$10bnAnnual earnings | After ten years at 45%$411bnAnnual earnings |
| ------------------------- | ------------------------------------------- |

Two hypothetical earnings paths

| Period  | 10% growth | 45% growth |
| ------- | ---------- | ---------- |
| Today   | $10.0bn    | $10.0bn    |
| Year 3  | $13.3bn    | $30.5bn    |
| Year 5  | $16.1bn    | $64.1bn    |
| Year 10 | $25.9bn    | $410.8bn   |

Pure compounding illustration, not a forecast of a specific company or the IT sector.

What could this mean for super?

Worked example: hypothetical $100,000 superannuation balance

| Exposure to affected technology stocks  | 15%     |
| --------------------------------------- | ------- |
| Hypothetical correction in those stocks | −30%    |
| Reduction in super balance              | −$4,500 |

Assumes all other holdings are unchanged. Neither the 15% allocation nor the 30% fall is an RBA estimate.

The RBA's warning

Concentrated technology valuations, rising debt and complex financing could amplify losses if future earnings disappoint — even if AI proves transformative.

Source: Reserve Bank of Australia, Brad Jones, AFR Super and Wealth Summit, 26 October 2026\. www.rba.gov.au