Billionaire hedge fund manager Paul Tudor Jones expects the broader markets to head higher through the end of the year, but over the next five to 10 years, he sees markets stuck in a trading range filled with big individual winners and losers.

What To Know: Jones, the founder and chief investment officer of Tudor Investment, believes the SPDR S&P 500 (SPY  ) can rally another 10% this year, but longer-term investors will have to sharpen their stock-picking skills.

"I think we're in just a big massive trading range ... I think we're going to have a more bifurcated market than we've ever had," Jones said Monday on CNBC's "Squawk Box."

Despite expecting stocks to bounce around for a multi-year period, the longtime investor believes a short-term rally is ahead, driven by the end of the Federal Reserve's interest rate response to high inflation.

He compared the current market setup to mid-2006, leading up to the great financial crisis, in which stocks trended up after the Fed stopped tightening. But his longer-term thesis is being driven by AI.

"I do think that the introduction of large language models, artificial intelligence, is going to create a productivity boom that we've only seen a few times in the last 75 years," Jones said.

There was a post-World War II productivity boom in the 1950s, another in the 1980s driven by the introduction of PCs and then there was a productivity boom in the 1990s sparked by the internet, he said, adding that all of them increased productivity by somewhere between 1% and 3%.

Jones told CNBC that AI could drive a 1.5% increase in productivity each year over the next five years, which could boost stocks, expand price-to-earnings ratios and drag inflation down.

"I think this one will be more bifurcated than it was back in those other ones, but yes, that makes me think the tide is coming in for the stock market," he said.

Last year, billionaire investor Stanley Druckenmiller said he expects the Dow Jones Industrial Average to trade essentially flat over the next 10 years. When Jones was asked about Druckenmiller's take, he didn't rule it out as a possibility.

"We have a long-term productivity boom that's going to come from LLMs ... so he can be right, and I can be right because there are going to be some big winners and big losers," Jones said.

SPY Price Action: The SPY is up approximately 8.2% year-to-date.