Unveiled: Secret Formula for Picking Millionaire-Making AI Stocks

If you’re investing in the AI theme for the long haul, here’s how to pick the winners

The excitement surrounding artificial intelligence (AI) has sparked a surge in investments in tech stocks, leading to the rise of the “Magnificent Seven” in 2023: Tesla, Amazon, Meta, Apple, Microsoft, Alphabet, and Nvidia.

These companies have significantly contributed to the market rally.

However, volatility is inherent in tech investments, and some of these stocks have experienced sharp declines, including Nvidia’s 10% drop on Friday.

Investors seeking exposure to AI should focus on companies with long-term potential and diversify their portfolios to minimize risk.

Diversification can be achieved through exchange-traded funds (ETFs), which provide exposure to a basket of stocks.

Experts recommend ETFs with a track record, high trading volume, and reasonable fees.

Some popular AI-related ETFs include the Global X Robotics and Artificial Intelligence ETF (BOTZ), the First Trust Nasdaq AI and Robotics ETF (ROBT), and the Global X Artificial Intelligence & Technology ETF (AIQ).

When selecting individual AI stocks, consider metrics such as cash burn, how funds are allocated, and government support, such as the CHIPS Act for chip companies.

Additionally, investors should avoid blindly chasing hot winners and explore companies like Microsoft and IBM that embrace AI while possessing a solid track record.

Volatility is a common challenge in emerging industries, leading to significant corrections, as seen with Nvidia’s recent decline.

To mitigate this, investors should consider ETFs or focus on stocks with a proven track record and diversification.

Overall, investors should remember that AI is a long-term trend with ample opportunities.

By adopting a thoughtful approach to stock selection and risk management, they can position themselves for potential gains while minimizing the impact of volatility.