{"id":616293,"date":"2026-06-02T02:32:21","date_gmt":"2026-06-02T02:32:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/616293\/"},"modified":"2026-06-02T02:32:21","modified_gmt":"2026-06-02T02:32:21","slug":"the-smart-money-thinks-ai-stocks-look-risky-but-is-there-still-a-chance-to-buy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/616293\/","title":{"rendered":"The smart money thinks AI stocks look risky — but is there still a chance to buy?"},"content":{"rendered":"

\"Concept<\/p>\n

Image source: Getty Images<\/p>\n

Institutional fund managers think there are clear risks with buying semiconductor equipment stocks at today\u2019s prices. But they\u2019re still doing it anyway.\u00a0<\/p>\n

The fundamentals supporting rising share prices still look pretty good \u2013 at least, for the time being. So what should ordinary investors like me do?<\/p>\n

Should you buy Micron Technology shares today?\t<\/p>\n

Before you decide, please take a moment to review this report first. Despite ongoing uncertainties from US tariffs to global conflicts, Mark Rogers and his team believe many UK shares still trade at substantial discounts, offering savvy investors plenty of potential opportunities to learn about.<\/p>\n

That\u2019s why this could be an ideal time to secure this valuable research \u2013 Mark\u2019s analysts have scoured the markets to reveal 5 of his favourite long-term \u2018Buys\u2019. Please, don\u2019t make any big decisions before seeing them.<\/p>\n

What are the professionals doing?<\/p>\n

Professional fund managers<\/a> think long semiconductor equipment stocks is the most crowded trade right now. That\u2019s according to the latest Bank of America survey.<\/p>\n

\"\"<\/p>\n

On the face of it, that looks like a sell signal. For stocks to keep going up, there needs to be more buyers \u2013 and those appear to be running out.<\/p>\n

The thing is, it\u2019s not quite as straightforward as this. Despite their reservations, the percentage of managers overweight in equities is at a record high.<\/p>\n

\"\"<\/p>\n

In a way, it makes sense \u2013 institutional investors can\u2019t afford to miss out on what looks like the only game in town. But things are different for the rest of us.<\/p>\n

If you\u2019re investing your own money, you don\u2019t have to participate in everything. So should you do what the smart money is saying, or what it\u2019s doing?<\/p>\n

Follow the money<\/p>\n

In fairness, the AI boom isn\u2019t just hype and hope. Companies involved in building data centres are making huge profits.\u00a0<\/p>\n

One stock I refer to a lot in this context is Micron Technology (NASDAQ:MU<\/a>). The company reported Q1 earnings per share of $12.07 \u2013 up 756% from the previous year.<\/p>\n

That\u2019s a huge increase, which is why the stock is up. And analysts are expecting<\/a> this to continue at least into next year:<\/p>\n

\"\"<\/p>\n

In my view, this is a highly plausible assumption. The reason is pretty straightforward \u2013 data centre spending is set to keep going higher.<\/p>\n

Amazon, for example, is expected to spend $200bn this year on AI. And analysts think that number is going to reach $209bn in 2027.<\/p>\n

While the spending keeps coming, the likes of Micron should do well. But sooner or later, it will stop \u2013 and when that happens, things could get ugly.<\/p>\n

Warren Buffett<\/p>\n

There\u2019s a Warren Buffett quote that I think long-term investors should keep in mind at times like these. It\u2019s this one:<\/p>\n

If you aren\u2019t thinking about owning a stock for 10 years, don\u2019t even think about owning it for 10 minutes.<\/p>\n

If AI spending stays at its current level for 10 years, Micron shares look like a bargain. But I don\u2019t think that\u2019s likely.\u00a0<\/p>\n

Amazon is still building into strong demand and it might stay that way for another 18 months.\u00a0But there\u2019s no way of knowing when things will change.<\/p>\n

The issue with Micron is that its earnings don\u2019t just go down in a downturn \u2013 they go negative. And investors won\u2019t want to own the stock if that happens.<\/p>\n

\"\"<\/p>\n

The stock is at $965 right now. It might well go higher from these levels, but I also think there\u2019s a good chance it\u2019ll be below $500 before 2030.<\/p>\n

Is it too late to buy?<\/p>\n

The smart money is backing AI stocks. And as long as the likes of Amazon keep spending, there\u2019s good reason to expect this to work in the short term.<\/p>\n

From a longer-term perspective, however, things look different. With a 10-year horizon, I think the opportunities elsewhere look much more attractive.<\/p>\n

Stephen Wright owns shares in Amazon.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Institutional fund managers think there are clear risks with buying semiconductor equipment stocks at…\n","protected":false},"author":2,"featured_media":616294,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":["post-616293","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/616293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=616293"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/616293\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/616294"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=616293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=616293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=616293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}