AI Stocks: The Silver Lining in an Otherwise Stormy Tech Market
Artificial intelligence (AI) stocks fueled stock market gains over the past two years as investors viewed AI as the next game-changing technology -- one that could join discoveries like electricity or developments like the internet.On top of this, investors were feeling optimistic about the overall economy. The Federal Reserve was wrapping up its interest rate increases and on track to start lowering rates -- and this happened. The central bank launched rate cuts this past fall and indicated that more would follow. Against this backdrop, growth stocks also lifted benchmarks as these types of companies thrive in better economic environments -- it's easier for them to expand, and their customers generally have more money to spend on products and services.All of this helped the Nasdaq advance more than 43% in 2023 and post a 28% increase last year. But in recent weeks, this sunny market environment has turned stormy. President Donald Trump announced tariffs on imports, a move that could weigh on prices, driving inflation higher and hurting corporate earnings. As a result, the Nasdaq fell into the correction zone, dropping more than 10% from its latest high in December. But here's the good news: Even though AI stocks are falling right now, they still remain a silver lining in this stormy market. Here's why.Continue reading
Artificial intelligence (AI) stocks fueled stock market gains over the past two years as investors viewed AI as the next game-changing technology -- one that could join discoveries like electricity or developments like the internet.
On top of this, investors were feeling optimistic about the overall economy. The Federal Reserve was wrapping up its interest rate increases and on track to start lowering rates -- and this happened. The central bank launched rate cuts this past fall and indicated that more would follow. Against this backdrop, growth stocks also lifted benchmarks as these types of companies thrive in better economic environments -- it's easier for them to expand, and their customers generally have more money to spend on products and services.
All of this helped the Nasdaq advance more than 43% in 2023 and post a 28% increase last year. But in recent weeks, this sunny market environment has turned stormy. President Donald Trump announced tariffs on imports, a move that could weigh on prices, driving inflation higher and hurting corporate earnings. As a result, the Nasdaq fell into the correction zone, dropping more than 10% from its latest high in December. But here's the good news: Even though AI stocks are falling right now, they still remain a silver lining in this stormy market. Here's why.
