The 2026 Investor’s Dilemma: Play It Safe or Chase the AI Boom?
Written by
Vance Cariaga
Edited by
Levi Leidy
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The artificial intelligence (AI) boom has given a needed boost to both the United States economy and Wall Street during a year when both have faced uncertainty due to tariffs threats and ongoing inflation.
A recent analysis from Pantheon Economics found that AI spending added about 0.5 percentage points to overall GDP growth in the first half of 2025, Fortune reported. Meanwhile, excitement over AI technology is a big reason the stock markets have hit record highs in recent weeks. The Magnificent 7 stocks are investing heavily in AI infrastructure, while leading AI stocks like Nvidia and Advanced Micro Devices continue to produce strong gains on Wall Street.
With so much focus on the surging AI sector, investors have a choice to make: chase the AI boom or play it safe? That’s a tough question, and the answer largely depends on your individual financial situation and investment goals.
Don’t Abandon the ‘Boring’ Stocks
Edward Corona, a Florida-based trader and publisher of The Options Oracle Newsletter, said he is often asked by his Substack subscribers about whether they should stick to traditional stocks or chase the AI boom. So how does he answer it?
“You don’t abandon the steady, boring money-makers like the S&P 500. That’s your foundation — it compounds quietly while you sleep,” Corona told GOBankingRates. “But I’m also not blind to the fact that some AI names have been absolute rockets. The trick is not to swing your whole portfolio at them. Keep your base solid, then carve out a smaller slice for those high-flyers.”
Like other financial experts, Corona stresses the importance of keeping a balanced portfolio so you don’t have too much exposure to any one asset type.
“That way, if AI keeps ripping higher, you participate,” he said. “If it crashes, you’re not wrecked — your core is still intact. It’s balanced bread-and-butter stocks in the middle, a little spice on the side.”
Dot-Com Lesson?
Another thing to keep in mind is that some stocks benefit from a broader sector surge even though they don’t have the underlying fundamentals to sustain themselves over the long term.
This has been the case for decades — and it provides a valuable lesson to investors who want to put a large percentage of their money into AI stocks, according to John Grace, founder and president of California-based Investor’s Advantage Corporation.
“Some think the answer is to pivot into AI stocks because they’re the future. And yes, artificial intelligence is transforming industries,” Grace told GOBankingRates. “But so did the internet in the late 1990s — and anyone who chased dot-com names without a sell discipline remembers how that ended.”
The problem isn’t that AI companies aren’t promising, he said. Instead, it’s that the stock markets price in expectations “years ahead of reality,” and even great businesses can be poor investments if you buy them at “euphoric” prices.
“AI stocks today are already trading at valuations that assume nearly flawless execution for a decade or more,” Grace added. “Any stumble — regulatory pushback, technological bottlenecks or a broad market downturn — could send them down sharply. And unlike a broad index fund, many AI plays are concentrated bets on a handful of companies. That’s not diversification — that’s gambling with a tech theme.”
He and other investment professionals warn against betting too much on the AI boom, especially if you have limited funds to invest. The better move is to chase AI stocks with part of your money and to balance that with investments in safer, more traditional stocks.
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