AI Boom: How Everyday Investors Can Capitalize On The Next Tech Gold Rush

Artificial intelligence is swiftly becoming widespread both in daily life (where users turn to AI-powered chatbots to source new recipes, locate local cultural and even religious events, write and edit emails at work, and even flirt with digital companions) and commerce (where AI bots dominate customer service and more companies supplement their workforce with AI agents amid concerns about staff workloads or staffing shortages).

AI continues to disrupt industries across multiple sectors–from automation and healthcare to finance, customer service, and education–and as yet it shows few signs of slowing down. The past two years have seen investments in artificial intelligence (or, more specifically, in the energy infrastructure and edge computing capacity required to support the growing thirst for AI) drive stock market growth. Of the five highest performing stocks in the Russell 1000 in 2024, three of the stocks were driven by the companies' investments in artificial intelligence. It is expected that the use of AI will continue to significantly drive economic growth in various industries across the world. 

An Opportunity for Investors

While this rate of economic growth continues, individual investors still have opportunities to tap into the profits of AI, whether through investing in high-performing tech stocks, exchange-traded funds, or in promising tech startups. In selecting an investment strategy, investors will need to consider carefully how bullish or bearish their strategy should be and what type of calculated risks they are willing to take. Investors researching AI stocks in different markets can use a free trial VPN to access region-specific reports. 

The reality is that futurists and tech experts alike offer a wide spectrum of predictions about what will happen next with AI. Notably, the job growth predicted by some AI proponents has yet to materialize, while at the same time the scale of the computing power and energy required to develop AI further is significant; Microsoft just reached a deal to reopen the Three Mile Island nuclear power plant to power its data centers in order to keep up with the computing demands of AI.

Options for the Bearish and the Bullish

For now, top tech stocks are soaring, but it is uncertain how long this bull market for AI will persist or whether the market is nearer the beginning of a parabolic curve or nearer its end. More risk-averse or bearish investors might consider slower bets, such as exchange-traded funds (ETFs). Occupying a place halfway between the stock and the mutual fund, ETFs hold diversified portfolios of multiple assets – just like a mutual fund – but their prices fluctuate throughout the day – just like a stock – so that shares can be bought and sold on an exchange.

Some ETFs, like VOO, track major indexes like the S&P, which currently are dominated by tech stocks but also diversified across multiple sectors. Others, like VUG, invest more aggressively in large-cap, growing stocks (which, right now, means tech, consumer discretionary, and healthcare). ETFs can allow more cautious investors to capitalize on the growth seen in today's tech market without taking on the risk of putting all of one's dollars behind a handful of stocks.

More bullish investors can monitor the tech industry to see who is making the big investments in AI (like that reopening of Three Mile Island) or for promising startups that have the potential to disrupt the market, such as small businesses that are producing AI voice agents for niche markets or developing high-performing small AI models at low cost. Monitoring fluctuations in the value of major cryptocurrencies like Bitcoin and Ether can also provide a weathervane for how much or how little volatility is developing in the tech market.

This post was authored by an external contributor and does not represent Benzinga's opinions and has not been edited for content. This content is for informational purposes only and not intended to be investing advice.