The AI sector remains strong despite recent corrections, showing tangible financial results and product/service improvements. While chipmakers continue to benefit, other companies could also profit from the AI trend. AI stocks surged in the new year, dispelling fears of a bubble burst. Big tech giants are committing more to AI, with spending expected to increase. The long-term potential of AI suggests continued growth and opportunities for smaller AI stocks.

AI sector growth differs from the dot-com bubble, driven by profitable tech giants like Nvidia, Alphabet, Amazon, and Microsoft. AI stocks have real revenue growth and applications, with long-term innovations like self-driving vehicles and humanoid robots on the horizon. The market has seen a surge in AI stocks, with strong potential for growth in the future.

Spending on AI technology is expected to increase, with megacap tech companies committing more to AI investments. Goldman Sachs predicts higher-than-expected AI spending this year, indicating long-term growth opportunities. Memory makers like Micron have seen significant stock price increases, reflecting the demand for AI chips. AI stocks are expected to rise again as companies leverage AI to enhance services and profits.

Smaller-cap stocks present better long-term profit opportunities in the AI sector, rallying during market upswings. AI chipmakers like Nvidia and Broadcom may gain value, but other companies addressing bottlenecks in AI, like energy and materials, also offer long-term prospects. AI stocks are likely to see continued growth, supported by technology advancements and market demand.

Read more at Nasdaq: Is the AI Bubble Bursting or Is the Sector Just Catching Its Breath?