Is It Really Safe to Invest in AI Stocks and ETFs Right Now? Here's What the Experts Say.
AI stocks can still be a great long-term investment.
Overview
Artificial intelligence (AI) stocks have been the driving force in the market over the last several years, but this summer, these names have started to come under some pressure. While there have been murmurs of an AI bubble, the vast majority of stocks in the sector trade at reasonable, if not downright cheap, valuations, unlike the sky-high multiples seen during the internet bubble.
The biggest fear, though, is a slowdown in AI infrastructure spending. Hyperscalers (owners of large data centers) are pouring unprecedented amounts of money into building out AI data centers, so anytime there is even a faint signal that this spending could slow, the stocks see some selling pressure.
Details
One recent example is Meta Platforms (NASDAQ: META) revealing that it could launch a cloud computing offering with some of its extra capacity. The fear is that the company already has excess capacity. Meta CEO Mark Zuckerberg offered some assurances by noting that computing demand is so strong that the economics of providing this computing power to third parties can be more attractive than for internal projects.
Source
Originally published at www.fool.com.