Is there an Artificial Intelligence (AI) bubble?

If there is an Artificial Intelligence (AI) bubble, how do you invest to address this?

Let’s start with some context.

Historically, the world’s largest stockmarket (the American S&P 500 index) and its top 10 stocks have significantly influenced its direction.

Over the last few decades, the top 10 stocks have typically accounted for around 25% of the index’s total value. However, this figure has risen closer to 35% in recent years. Currently, the five largest stocks in the Index (Microsoft, Apple, Nvidia, Alphabet, Amazon) account for 27% of the total value of the index.

This has led to speculation we are entering another investment “bubble”, specifically in companies with a particular focus on AI.

Click the image to download our investment partner ebi’s blog that reviews this in more detail and discusses how to invest to avoid becoming a victim of the next investment bubble.

If you are keen to better understand how much exposure a typical Swindells investor currently has to the five shares mentioned in the ebi blog, an overall investment portfolio comprised of 80% shares all around the world and 20% loans to governments and companies across the globe, these five companies represent approx. 6.2% of total monies invested as illustrated in this graphic.

 

If you have any questions relating to your investments, please get in touch on 01825 76 33 66 or via the form below.

This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances. The value of investments and any income from them can fall as well as rise. You may not get back the full amount invested. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The taxation of the investment is dependent on the individual circumstance of each investor, and may be subject to change in the future. The favourable tax treatment of ISAs may be subject to changes in legislation in the future. The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested. Levels and bases of, and reliefs from, taxation are subject to change and their value will depend upon personal circumstances. Taxation and pension legislation may change in the future. A pension is a long-term investment and the value is not guaranteed. Any advice or considerations are personal to each individual’s circumstances.