Why you should take profits on hot AI stocks like Nvidia

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Some of the most popular names in tech and AI have seen their fortunes turn during a surprise sell-off that has caught many investors flat-footed. Extremely ...

Some of the most popular names in tech and AI have seen their fortunes turn during a surprise sell-off that has caught many investors flat-footed. Extremely hot AI stocks, such as Nvidia (drills into the popular AI stock trade with Citi’s Director of US Equity Strategy Drew Pettit. Pettit effectively predicted a short-term top in AI stocks in early July. He told clients that he was worried about AI stock valuations and the potential for a bubble. For now, he has been proven right.

Tell me if you agree with me or, or I'm off, I, I get the sense when it comes to a, I, most investors have no clue what these companies do. So to me you see a broadening of A I, because it can't just be one or two names that win for this to be the next big thing.

There are a lot of companies out there saying they are playing in the A IA I fear retailers suddenly we're now some form of A I company uh and even tech companies for that matter saying they're A I, but there's no clear path to making money off this stuff.Is that an A I company?So maybe not A I in the sense that it's generative A I like you see with what Microsoft is trying to produce.

Are you seeing similarities between this current A I cycle A I cycle and the, and the internet bubble a little bit in how some of the price action has moved. But I mean, so you longer term, you view A I, this is a as big as people are making it out to be, it will structurally impact the economy.I mean, are you all on board here?

I just feel like people are looking for the way to make a quick buck and again, back to it, it's, it's not fun to talk about, but I do think there's risks on both sides and I hate to be completely neutral. That's, and that's the offset when people talk about, oh, they'll extend the tax cuts, they'll extend the tax cuts.But then, you know, you need the revenue side for the government to get kicked in.I think tariffs get a little bit more disrupt, disruptive if they get put in aggressively right away.But the thing that keeps us up at night is no one wants to address deficits like everybody wants to put it.

So, you know, even if we have softness, I don't think those are the worst stocks to start thinking about right now.Um, last week, Drew World Post, Ceo Mark Bitzer. It's, it's both, it's not either or if you get good data, positive data and the fed cutting, that's how this market rips higher from here in a couple of minutes.How are you getting questions already from clients on how they should be positioned into year end?I think it's a good time to bank some of that in tech, in communication services.So we're talking about financials and we're talking about consumer discretionary.

 

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