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The TSX Index doesn’t have to be hard to beat as long as you’re not chasing the hottest plays on the stock market. These days, the tech sector is showing quite a bit of froth as AI chip plays continue drawing in massive crowds.
Undoubtedly, the top AI chip plays only seem to keep climbing higher. And though they are continuing to cash in from the rise of a powerful trend, investors must realize that eventually, the punch bowl will be taken away, and losses could come in fast and furious.
Of course, there are “special” stocks that can justify their blistering runs with equally blistering earnings growth. And though it can be hard to tell (especially in the early stages) which firms will win most from the rise of AI, I do think it makes sense to revisit one’s valuation of a company to ensure they’re not on the receiving end of the next correction.
You see, even the highest flyers can implode…
