AI stocks are widely regarded as the ultimate growth plays. Major S&P 500 companies like Nvidia, Microsoft and Alphabet are at the forefront of monetizing AI technologies. 

The primary drawback of these pure-play AI stocks is their lofty valuations. Put simply, when you buy these stocks at peak prices, there’s little margin for error if they fall short of expectations.

AI isn’t a stand-alone sector, though. As AI gathers momentum, its adoption is accelerating across industries such as financial services, healthcare and manufacturing, to name just a few.

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AI is not just a trend—it's a structural shift in how businesses operate. Companies leveraging AI aren't just cutting costs; they're creating entirely new capabilities, automating insights that used to take days into minutes. That kind of value creation translates directly into market competitiveness, which is why the sector is seeing such explosive growth.

– Josh Pantony, CEO of Boosted.ai.

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Tip: For a balanced approach to AI investing: consider investing in AI-focused ETFs.

AI is a burgeoning sector with tremendous promise. However, nobody can tell you definitively whether you should invest in AI stocks. 

The decision to invest in AI stocks needs to be made by each investor, depending on that investor’s portfolio and what they believe the future holds for the industry. 

See our list of the best online brokers to start investing in your favorite AI stocks.