Worried About the Pullback in AI Stocks? Here's How to Protect Your Portfolio.

Artificial intelligence (AI) stocks have been almost a sure path to gains over the past two years, but in recent days, investors and analysts have worried about the prices of these players. They've become more expensive, and some market experts have expressed concern about a possible bubble forming -- bubbles generally burst, resulting in significant declines, and this idea has weighed on AI stocks in recent days.Palantir Technologies saw its shares fall 11% this past week, even after the AI-driven software company reported fantastic earnings growth. And AI bellwether and chip company Nvidia declined 7%, even as other tech players spoke of high demand for AI products and services. This pushed the Nasdaq to its worst week since April, a time when investors sold tech stocks amid concerns about President Donald Trump's import tariff plans.Though stocks as a whole have become expensive -- the S&P 500 Shiller CAPE (cyclically adjusted price-to-earnings) ratio has reached one of its highest levels ever -- this doesn't necessarily mean AI stocks are heading for a crash. Tech giants from Amazon to Alphabet have wowed investors with their recent earnings reports, and much of their growth has come from strong AI demand. This offers us visibility into earnings potential ahead, and things are looking bright.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool