Famous investor Jeremy Grantham, co-founder and chief long-term investment strategist at asset management firm GMO, returned to CNBC's Squawk Box program, warning of one of the most dangerous correction waves the U.S. stock market may see.

Grantham, whose firm manages an estimated $85 billion in assets, said the U.S. stock market has become "the most expensive in history," noting that a return to normal valuations could be closer to a broad crash than just a routine correction.

He explained that many stocks of companies benefiting from the artificial intelligence boom are now showing clear signs of overvaluation and speculation, warning that some of these stocks could fall by as much as 70% if investor appetite wanes and valuations return to historical levels.

He noted that this scenario could materialize within a period ranging from two weeks to two years, stressing that his predictions represent an analytical reading based on his long experience in spotting market bubbles, not a confirmation that a crash will occur on a specific date.

Grantham compared the current conditions to the peak of the internet bubble in 2000, considering that current valuation levels appear more extreme than they were back then.

He also warned that any sharp decline in AI company stocks would not be limited to Wall Street but could extend to the real economy through a drop in consumer confidence, decreased spending, and slower hiring, reminiscent of the repercussions of previous asset bubble bursts.

Within the framework of his investment outlook, Grantham called for reducing exposure to U.S. stocks and increasing investment in international markets, which he believes have more attractive valuations, along with allocating a portion of investment portfolios to bonds and precious metals, especially gold and silver.

Grantham is known for his track record in warning of major financial bubbles, having previously alerted about the Japanese asset bubble, the internet bubble, and the U.S. housing crisis, making his latest warnings a subject of widespread interest in investment circles.

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