There’s no question about it — AI is the hottest topic in investing right now.

From chip makers to cloud providers, almost every company is trying to position itself as part of the AI revolution. The buzz is real… but so are the risks.

AI investments are booming — global spending on generative AI topped US $33 billion last year, and it’s still climbing. But not every AI project turns to gold. Some fizzle out due to high costs, poor data, or no clear path to profits. The real challenge for investors? Figuring out which companies are using AI to genuinely improve productivity — and which are just adding “AI” to their marketing.

Where the Opportunities Are

• Behind-the-scenes players — chipmakers, data centers, and infrastructure companies that make AI possible.
• Software and automation — tools that actually help businesses save time and money.
• Everyday adopters — healthcare, logistics, and financial firms using AI to get smarter and more efficient.

What to Watch Out For

• Too much excitement in too few stocks. A small group of tech giants has driven most of the gains.
• Valuations that assume perfection. Some prices look more like hope than math.
• Regulatory speed bumps. Governments are still figuring out how to oversee AI responsibly.

Smart Investor Moves

• Mix broad exposure with a few targeted “AI satellite” positions.
• Focus on companies with real earnings and solid balance sheets.
• Keep global diversification — Canada, the U.S., and abroad — to balance opportunity and risk.

Bottom line: AI will shape the next decade, but staying diversified and disciplined is still the best way to benefit from innovation without betting it all on the next big trend.

Source: bloomberg.com