Many ISA investors have done splendidly in recent months. The FTSE 100 index is booming, having risen to a record 10,700 in recent days. The FTSE 250 is also now higher than it has been since late 2021.

Plus, despite all the uncertainty due to President Trump flip-flopping on tariffs, the global economy has held up well. In 2025, almost every major global index jumped by 15% or more.

Yet there’s something that has been worrying me (and others here at The Motley Fool) for some time now. It has the potential to cause an almighty crash, potentially causing carnage inside many Stocks and Shares ISAs (including my own).

A big potential iceberg

Besides the odd day off here and there to do other things, I basically sit most days reading and writing about stocks. As such, I consume lots of financial reports and trading updates.

Granted, that’s not the sort of line I would put on a dating site. But it does give me an insight into what companies are saying and doing. And one thing that I’m reading over and over is how companies are using AI to become more efficient.

Now, that can mean a few different things depending on the industry. Tesco, for example, is using AI to optimise routes and reduce thousands of miles a week for its delivery lorries and vans. Another firm might reduce electricity usage to save money.

However, in some cases, efficiency is corporate-speak for job losses. Fintech giant Klarna has reduced its workforce by roughly 40%, stating that its AI assistant now does the work of hundreds of customer service agents.

Other companies doing large layoffs include Salesforce, Microsoft, and Dow Inc. In June, Amazon’s CEO said its goal was “to reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company“.

Will more and more AI-related job losses start showing up? And if so, will the market freak out due to fears about a consumer spending downturn?

This risk is heightened with the market at record levels.

What I’m doing?

Now, I might be wrong here (I hope I am). After all, the market is forward-looking, and it’s not currently pricing in mass AI job losses. So I might be worrying for nothing.

As such, I won’t be selling any of my shares. But I am going to start stockpiling some spare cash because every crash in history has created incredible buying opportunities. And I wouldn’t expect the next one (if it happens) to be any different.

For instance, a widespread crash may create an opportunity for me to buy more BAE Systems (LSE:BA.) shares. The weapons maker has surged 365% in five years, leaving the price-to-earnings ratio above 30 today.

That price is too high for me. It doesn’t leave any room for earnings slip-ups (a key risk), and is much higher than in previous years (many investors avoid defence stocks for ethical reasons).

However, BAE’s growth would likely be immune from a big drop in consumer spending due to job losses. Indeed, the UK government has just signalled that it intends to spend more money faster on military equipment. Ditto Europe.

This should boost earnings and dividends moving forward. As such, BAE’s on my ‘market crash shortlist’.