"As the AI trade gets overheated and calls for some sort of bursting of the AI bubble grow louder, it might make sense to look to opportunities to be had within other sectors. Undoubtedly, the AI-fuelled tech boom may very well continue for another year or more, as the firms strive to be among the first to achieve some form of artificial general intelligence (AGI). Still, there's no denying that the stakes are higher, along with valuations."
"For investors seeking momentum beyond the AI trade, the biotech scene is starting to look interesting again after a strong year of recovery gains and a potential stage set for a year-end breakout. And given the lower degree of correlation to what's powering the AI names higher, growth-focused investors might wish to give some of the long-forgotten biotech ETFs a second look. Despite the newfound momentum, there are still great relative value plays,"
The AI trade shows signs of overheating, prompting interest in opportunities outside of AI-driven tech. Biotech has recovered strongly and looks poised for further momentum, offering lower correlation to AI winners. The iShares Biotechnology ETF has risen over 32% in six months, aided by hopes for lower interest rates and rotation into less economically-sensitive growth. Federal Reserve rate cuts help but additional catalysts such as increased M&A activity and AI-enhanced drug discovery could drive a breakout. Biotech valuations remain modest despite outperformance versus the S&P, making select biotech ETFs potential value plays.
Read at 24/7 Wall St.
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