AI stocks may be the hottest on the market right now
Fidelity International, a financial services giant, is urging investors to broaden their horizons when it comes to profiting from the artificial intelligence (AI) boom.
While AI stocks like Nvidia (NVDA) are currently red hot, Fidelity suggests there are more strategic options available.
“Instead of chasing the so-called hot AI stocks – because today’s big names might not be tomorrow’s winners – investors should consider the many indirect beneficiaries,” advised Fidelity in a recent report. These indirect beneficiaries are companies that don’t solely develop AI technology, but implement it to elevate their existing products or services.
The report highlights sectors like technology, advertising, and cybersecurity as potential areas for finding these indirect plays. Companies like Microsoft, Apple, The Trade Desk, and Fortinet are just a few examples.
Fidelity’s reasoning behind this approach is twofold. Firstly, these companies tend to be more diversified than pure AI stocks, potentially offering more stability. Secondly, they are still positioned to benefit from the overall growth of AI, even if their core business isn’t strictly focused on it.
In essence, while Nvidia is undoubtedly a major player in the AI landscape, Fidelity recommends that investors take a more comprehensive approach. By considering companies that are leveraging AI to enhance their existing offerings, investors may open themselves up to a wider range of promising opportunities.
