Legendary investor Mohamed El-Erian says he likes these 2 corners of the market as war-fueled volatility continues

• Economist Mohamed El-Erian is warning investors of more volatility from the Iran war.
• The former PIMCO CIO said he wasn't willing to call the bottom of the sell-off just yet.
• He highlighted two parts of the market that interested him at the moment: AI stocks and gold.

Mohamed El-Erian has two ideas for investors looking to buy the market.

The top economist highlighted a few areas of the market that interested him, despite the latest volatility stemming from the Iran war. The VIX, the market's volatility gauge, remains elevated at around 26 — and there's likely more downside to come, El-Erian suggested, speaking to Fox Business on Monday.

"It's not just about valuations. It's also about fundamentals. It's also about technicals," El-Erian said, adding that he wouldn't call the bottom just yet.

"If you are picking at stocks here, you are buying a lot of volatility, and you have to be able to underwrite that volatility," the former PIMCO CIO later added.

Markets have been on rocky footing since the Iran war began late February. Over the last month, fears of higher oil prices and hotter inflation have sent the major indexes plummeting by 10% or more, with the Dow and Nasdaq 100 briefly entering a correction in late March.

Here are the areas El-Erian said he was eyeing amid the chaos:

Specific AI stocks

El-Erian said he bought some stocks "on discount" in the tech sector last week — specifically, AI companies that had both horizontal and vertical integration. That describes companies that have gained market share by absorbing their competitors, or companies that have acquired control over different stages of production to lower costs.

El-Erian said he believes these companies would "manage this process particularly well," referring to the ongoing volatility in markets.

"I picked up the tech, a subgroup of the tech, because I think I understand that for me, this is money that I can keep in the market for a very long time," he added.

Gold

Gold has floundered this year after a record-breaking rally in 2025. The precious metal has tumbled 12% from its late-January peak — but its latest decline has actually brightened its outlook going forward, since the sell-off has flushed out speculators in the market who were pushing up the metal's price, El-Erian said.

Meanwhile, the fundamental case for gold remains, he said, referring to bullish factors like central banks buying more gold.

"I do like gold," El-Erian said. "The whole gold complex is something that, in my view, is attractive long-term."

El-Erian has cautioned investors about the broader market outlook, given the overarching economic risks from the war in the Middle East. Previously, he said he would avoid buying major stock indexes, and recently bumped up his recession odds due to the spike in oil prices.