Warren Buffett’s warning about stock markets feels more relevant than ever in 2026!

2026 has seen lots of action in the stock market. One small but significant change was legendary investor Warren Buffett stepping down from day-to-day control at Berkshire Hathaway after decades in charge.

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But that does not mean that Buffett’s hard-earned investing wisdom is not still relevant.

In fact, the way 2026 has been shaping up in the stock market, I reckon some of Warren Buffett’s thinking may be more relevant than ever!

This looks like a greedy market at least in some areas

Specifically what I have in mind is the Sage of Omaha’s injunction to “be fearful when others are greedy, and greedy when others are fearful”.

Is there a lot of greed in the market right now?

I think so. Now, that may not be evenly spread. In fact, some pockets of the UK stock market continue to look cheap to me, with unloved shares selling for what I see as bargain prices.

But other bits of the market are seeing the sort of greed I associate with the dotcom era. AI is an obvious example. However, this is not just about AI.

I think tech in general continues to offer many greedy-looking valuations and other sectors are starting to show a similar trend – defence being one.

During the first quarter with a new chief executive, Berkshire continued to be a net seller of shares, as it had been under Warren Buffett for the preceding several years.

Its cash pile is now $380bn – but apparently it does not see attractive enough opportunities to deploy cash faster than it is coming in.

So, perhaps now is the moment when investors taking a leaf from Buffett’s book ought to be “fearful”?

Turning theory into actionable practice

What does that mean?

One potential reaction can be to review a portfolio to see what valuations look unjustifiably high from a long-term perspective, then to consider whether to keep those shares or take profit by selling them.

Another is to do what I think smart investors do in any market – think carefully including from a financial perspective before buying more shares.

Take Nvidia (NASDAQ: NVDA) as an example.

I have long liked the chip giant. While it has certainly benefitted from surging demand on the back of AI, this is not some one-hit wonder. It has been innovating in the chip space for decades.

Before AI exploded it had already built a large customer base by offering specialist chips for a variety of purposes such as gaming.

AI has been a force multiplier for Nvidia, though. Its revenues and earnings have soared.

At 33 times earnings, the valuation does not seem ridiculous.

A voice in my head points to the recent earnings growth and potential for that to continue, as sales surge. First-quarter revenue was up 85% year on year while net income more than tripled.

But wait – am I being greedy?

After all, maybe the initial AI buildout is a costly one-off for many companies. There is a risk revenue and earnings could fall back sharply.

Or am I being fearful?

Some fearfulness can be helpful in greedy markets. At the current price, I will not be buying Nvidia stock.

Should you invest £5,000 in Nvidia right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Nvidia made the list?

Christopher Ruane does not hold any positions in the companies mentioned.