"The AI trade might have gotten a whole lot bumpier after rolling through big tech earnings season, but the boom still seems to be very much on the table. And while the trajectory could continue higher from here, investors should be ready for just a bit more turbulence. Undoubtedly, it's hard to tell exactly where we stand in the AI revolution."
"Whether that's within non-tech corners, underappreciated areas of tech, or within the AI trade itself, I certainly wouldn't bet against the names that don't look all too bubbly right here. I'd argue that you don't need to look too far within the AI trade to come across stocks that are nowhere near as overvalued and overhyped as the peak of the internet bubble."
"which is pretty much the price of admission into the tech- and AI-heavy Nasdaq 100 index. Though things are getting historically frothy, I don't think we're at a point where it makes the most sense to sell out of tech, or, even more extreme, go short big tech, as Dr. Michael Burry of The Big Short fame has done with put options against Nvidia (NASDAQ:NVDA) and Palantir (NASDAQ:PLTR)."
The AI trade grew bumpier after big tech earnings, yet the AI boom remains intact and could continue higher. Investors should prepare for additional turbulence even as upside persists. Relative value considerations matter more than constant dot-com comparisons. Opportunities may exist in non-tech sectors, overlooked areas of technology, or within modestly valued AI names. Many AI stocks are less overvalued than dot-com-era extremes. Historical 1999 multiples were extreme, but current froth does not mandate selling all tech or shorting large AI leaders. Shorting prominent AI chipmakers like Nvidia remains a risky strategy given ongoing AI adoption.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]