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Globe's Heinzl says if Nvidia falters, watch out

2023-06-26 09:31 ET - In the News

See In the News (C-NVDA) Nvidia CDR (CAD Hedged)

The Globe and Mail reports in its Saturday edition that the best way to invest in the AI trend is with caution. The Globe's John Heinzl writes that we have seen this movie before with the dot-com madness of the late 1990s, the bitcoin bubble and, more recently, the COVID-19-related surge in tech companies that benefited from the shift to working, shopping and exercising at home. Pandemic darlings, however, got crushed when interest rates started to climb. As reality set in, tech giants including Microsoft, Amazon, Alphabet and Meta collectively laid off more than 50,000 employees. Now, the AI boom has picked up where the pandemic rally left off. Perhaps no stock illustrates this better than Nvidia, which supplies the powerful graphics processing units used by Microsoft-backed ChatGPT and other AI applications. Nvidia shares have nearly tripled since the start of the year. Mr. Heinzl says if Nvidia stumbles, even a little, watch out. He warns against loading up on AI companies in the hope of riding the boom to big riches. He says a more prudent approach is to invest a portion of your portfolio in an exchange traded fund that holds a diversified basket of technology stocks, such as the BMO Nasdaq 100 Equity Index ETF.

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