My Top 3 Predictions for AI Stocks in the Second Half
AI stocks have driven stock market direction in recent years.
Overview
Artificial intelligence (AI) stocks have supercharged the S&P 500 over the past three calendar years, leading the index to multiple record highs. But periodically, these high-growth players have faced headwinds that have weighed on their performance. General concerns about the geopolitical and economic backdrop earlier in the year pushed investors to rotate out of some of the top-performing AI players and into other industries viewed as "safer" -- for example, some investors chose to invest in pharmaceutical companies, businesses that generally deliver a certain level of revenue stability due to the essential nature of their products.
Investors also worried about the high valuations of certain AI stocks after double- and triple-digit stock price gains in recent years. Valuations have since come down, and in many cases, they've reached interesting levels.
Details
This decline in valuation, ongoing strong demand for AI products and services, and an improving geopolitical setting boosted investor optimism in the second quarter -- and AI stocks picked up positive momentum. The S&P 500 finished the quarter with a nearly 15% gain for its best quarterly performance in six years.
Source
Originally published at www.fool.com.