Be Cautious of Hot AI Stocks, Warns Investing.com

Investors looking to make quick and high returns by investing in hot artificial intelligence (AI) stocks need to exercise caution, warns a report on Investing.com. While the sector presents an exciting growth story, smaller companies may not have a proven track record, their business models might be untested, and their financials may not be stable, it notes. Established companies, such as Alphabet, Microsoft and IBM, have also been investing heavily in AI and have already shown the ability to generate significant returns, the report adds. Furthermore, these companies offer diversification that smaller, niche AI stocks cannot match. For investors looking to avoid individual stock selection, the Investing.com report suggests investing in AI-related exchange-traded funds.