Retail investors in AI stocks may get burned like they did in past bubbles, says Bank of America

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Investors may want to exercise some caution with this year's leading artificial intelligence stocks, according to Bank of America.

Investors may want to exercise some caution with this year's leading artificial intelligence stocks, according to Bank of America. "History shows the winners from new tech booms are often the broad economy, not early investor benefactors," wrote Jared Woodard. "Credit spreads say the stock rally is unstable, flashing the biggest warning since the dotcom bubble.

mountain NVDA year to date "The narrow U.S. market rally, premised as it is on extended capex cycles and quiescent capital, looks shaky," Woodard said, noting that profit growth expectations for stocks within AI ETFs have dropped 16 points from a peak in February. "Investors are getting restless." For Nvidia in particular, he noted that each new chip reduces the value of some of its older investments. Shares of the leading chipmaker have rallied more than 140% this year.

 

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