AI is fueling market gains, but nearly half of US stocks are in the red. Debate rages on if it’s a bubble, with some names like Nvidia trailing AI infrastructure stocks like Palantir and Micron. Advisors warn of overvaluation and urge diversification.

Market-cap-weighted S&P and Nasdaq overlap shows a concentrated market. Valuation risk is high, with the spread between growth and value at a historical high. Timing a bubble burst is challenging, as history shows missing out on gains if you act too soon.

Some experts warn of a potential AI bubble, comparing it to the dotcom era. Others see AI as a powerful driver of future growth. Advisors stress diversification to manage risk and avoid FOMO. Transitioning to equal-weighted indexes could reduce exposure to overvalued stocks.

Advisors are concerned about clients missing out on the AI boom. Stressing disciplined diversification is key to long-term financial goals. Transitioning to equal-weighted indexes may reduce exposure to risky AI stocks. Advisors urge caution and vigilance in managing investment portfolios.

Read more at Yahoo Finance: How Advisors Are Weighing the Risks of an AI Bubble