A billionaire US investor has issued a warning against the persistent optimism surrounding the stock market.

Leon Cooperman, a billionaire investor and CEO of Omega Advisors, recently said in an interview with CNBC, "I think a recession will come at some point next year," adding, "This will probably drag the market down."

What caught Cooperman's attention in the current market are similarities to past stock market "bubbles."

He compared the "Nifty Fifty," large-cap growth stocks that dominated the US stock market in the 1960s and 1970s, to the current AI investment frenzy.

At the time, investors flocked to a handful of large-cap stocks boasting high growth potential, but when international oil prices surged and inflationary pressures mounted in the 1970s, stock prices took a heavy hit.

Cooperman believes that current investors are also failing to adequately price in similar risks.

In particular, he pointed out that investors are overlooking rebounding international oil prices and the resulting inflation.

In fact, international oil prices have recently remained about 22% higher compared to before the Iran war began.

Signs are also emerging that American consumers are starting to close their wallets due to high prices.

On the other hand, the overall US economy is still showing a solid trend.

The Federal Reserve Bank of Atlanta estimates that US third-quarter gross domestic product will grow by 4.3%.

However, Cooperman views that earnings forecasts for S&P 500 companies are not currently being appropriately valued and maintains a negative stance on the market as a whole.

"It is interesting that everyone is forecasting a bull market," he said, mentioning the possibility that investors could dump stocks en masse if bad news hits the market.

He also forecasted that the US economy could fall into a recession as early as the end of this year.

Reported by Kim Jiuk | Video by Lee Da-in | Design by Lee Su-min | Produced by SBS Digital News