Yesterday’s market was a head scratcher. While the Dow plummeted, AI stocks like Nvidia took off. So is AI the safe haven in a weak market?
The Fed is due to throw another wrench in the gears today and it is unlikely it is going to make the markets any less unhappy. This makes the AI stocks an attractive place to look for some wins.
Nvidia is definitely a leader in terms of stocks in the AI space and while the it is tempting to chase the big jumps it has made there may be a smarter play.
Since ETFs represent a pool of assets or stocks, they offer diversity within that pool. This means you aren’t tied to that one stock in the group that might have a bad day. Conversely, if one stock pops, the gains in the ETF may lag a bit as the rest of the stocks in the pool catch the wave.
You can see in the AI ETF AIQ above that it had been pushed down a bit and is starting to recover. The big news from Nvidia may be just what it needs to recover to a recent high or better.
Let’s watch this one and see if it may be the cure for AI fomo.
Keep learning and trade wisely,
Market Wealth Daily