💡 AI & The Stock Market: What’s Hype, What’s Real and Why You Need to Learn This Now

Nov 5

AI is officially woven into the zeitgeist. We are feeling it at work when our bosses ask us how we can layer AI into this or that process, on social media in the comments when people are guessing whether that weird cat video is AI or not, or at home when we ask ChatGPT to roast us for our self-deprecating enjoyment.

But how does AI impact our money and the stock market? Should we change how we are investing?

If you’re feeling equal parts curious and panicky… you’re not alone.

I know so many of you are trying to learn and do all the right things… saving, investing, building wealth but suddenly it might feel like the game is changing overnight.

So, let’s talk it through. Here’s what’s hype, what’s real, and what to actually do about AI investing (in plain English).

And if you want to learn more about investing in general and feel confident in this current moment, join my next Beginner Investing Workshop so you can feel confident investing through any new trend including this one.

1. What does “investing in AI” actually mean for regular people like us?

The annoying answer is that it means different things, to different people, in different contexts.

Companies are investing in AI from the perspective of investing the company’s money into research and development to effectively layer AI into their existing businesses to create efficiencies or developing new AI technology, all with the goal of more revenue and profits.

When institutional investors say they’re “investing in AI,” sometimes they mean they are buying companies focused on AI infrastructure (think Nvidia or Palantir) hoping that it skyrockets in the future.

But AI isn’t just a few companies. We have to think of it like general-purpose technology, like electricity or the internet. Every industry will use it: software, healthcare, energy, finance, even farming.

And the spending? It’s enormous.

Big Tech poured hundreds of billions into AI infrastructure in 2024 and plans to go even harder in 2025. (Business Insider)
Goldman Sachs projects $3–4 trillion in global AI infrastructure spending by 2030.
The IMF says an AI “boom-bust” cycle is possible but not a full-blown crisis. (Reuters)

💭 Translation: This is bigger than any one stock. You’re investing in how the world will run the next generation of business.

👉 We’ll break this down live how to invest in the new economy without chasing hype. [Reserve your seat →]

2. You already have more AI exposure than you think

If you own a simple S&P 500 index fund or Total US Stock Market Fund or even for that matter a target date fund (a kind of all-in-one investment that adjusts automatically over time) in your 401(k)… congratulations! You already have front-row seats to the AI show.

The “Magnificent Seven” mega-cap tech companies — Apple, Microsoft, Nvidia, Amazon, Google, Meta, and Tesla — now make up over 35% of the S&P 500 index. That means the performance of the US stock market is massively impacted by these large companies that are of course investing massive amounts of their money into AI.

So if you’re investing in broad U.S. stocks, you already have a massive AI bet by default.

Good news: you didn’t miss the train.
Bad news: if that handful of giants stumbles, your portfolio feels it but remember, the stock market moves in cycles just like the seasons. This technology is here to stay and just like everything else new there will be periods of growth and periods of challenge.

So yes, AI is already baked into your portfolio. But here’s why that doesn’t mean you should stop there…

3. Why you might want to diversify beyond Big Tech

With AI feeling ubiquitous it’s tempting to throw all our eggs in this basket. It’s certainly not going anywhere and has already changed the way we work and live at a rapid clip.

But no matter how groundbreaking a trend looks, the future is never guaranteed.

Markets move in cycles, sectors take turns leading and lagging, and even the strongest companies stumble. That’s why diversification, spreading your money across different types of investments, is always the quiet hero of long-term investing.

It doesn’t make the biggest headlines, but it’s what keeps your plan working when volatility hits (not if).
When one part of your portfolio dips, another may hold steady or even rise. The goal isn’t just to chase returns it’s to stay invested long enough to earn them.

Here are some ways you can invest outside of US AI stocks:

🌎 International stocks: Completely different geography and sector mixes smooth out U.S. volatility.

🧱 Small-cap and value stocks: “Small-cap” just means smaller companies often less flashy and certainly volatile but with room to grow (think of these companies as teenagers with potential.) “Value” stocks are those trading at lower prices compared to their fundamentals (like earnings or dividends). These categories don’t always move with Big Tech and can quietly outperform when trends shift.

💰 Bonds and cash: Provide stability and buying power when stocks swing.

🏠 REITs: Add real estate exposure that moves differently from tech-heavy markets.

Diversification doesn’t mean you’ll never see losses but it means you might not see them all at once unless there is a systemic market impact from something. If your portfolio is one big tech smoothie, it’s time to add some new flavors so your wealth can keep compounding, no matter what’s trending.

4. Where you might want to hold AI heavy, high-growth potential investments

If you believe in the long-term potential of technology, especially with AI driving innovation across industries, a Roth IRA can be one of the smartest places to hold those high-growth investments.

Roth IRAs grow tax-free, meaning that if your investments skyrocket over time, you get to keep every dollar of that gain. That makes them an ideal home for assets with big upside potential like tech funds or broad market ETFs that lean toward growth sectors.

Now, that doesn’t mean you should fill your Roth entirely with risky bets. It just means that if you’re allocating a portion of your portfolio, say 5–10%, to more speculative or “rocket fuel” investments, the Roth can be the most tax-efficient place for them.

Just remember:

⚠️ The Roth doesn’t remove risk. High-growth investments can still swing wildly.

🧭 Keep your overall allocation balanced so one bet doesn’t steer the whole ship.

📜 Tax laws can change, so always stay informed.

5. Is this a bubble?

Maybe. I can’t say for sure because I don’t have a big enough ego to pretend I know what’s going to happen nor am I a psychic medium.

But I don’t think it’s the same kind of bubble we saw in 1999 with the dotcom bubble.

AI has all the classic bubble ingredients including hype, momentum, and soaring valuations, (which simply means that investors are paying a lot for each dollar a company earns) yet this time, the leaders are profitable giants funding their own growth with cash.

Even if some “mini-bubbles” pop, the broader AI trend still has legs. Productivity gains take years, not months, to show up.

So whether this turns into another dot-com moment or not, the best move is to ground yourself in what you can control.

6. So what should you actually do right now?

Here’s how I’m thinking about investing (and preparing) in the age of AI as a grounded, Accredited Financial Counselor®.

1️⃣ Know what you already own.
You’re probably more exposed to AI than you realize. If you hold an S&P 500 index fund, you already own plenty of the companies driving this revolution. You don’t need to chase every new stock that pops up on CNBC.

2️⃣ Diversify intentionally.
If you want to reduce a bit of volatility, don’t let your portfolio turn into one big tech bet. Learn about other types of funds like global, small-cap, and value-based funds that may not all move in the same direction.

3️⃣ Protect your personal economy.
AI isn’t just changing the stock market, it’s reshaping entire industries and it’s going to impact all of us if it hasn’t already. This is a time to be really mindful of how it could affect your job or income stream. Here’s what I would be thinking about if I thought my job was at risk at all:

Build or replenish your stability fund (3–6 months of essential expenses)
Keep enough cash on hand so you’re not forced to sell investments during volatility.
Keep leveling up your skills and learn how AI impacts your industry so you can adapt, pivot, or lead within it.

4️⃣ Use tax-advantaged accounts wisely.
If you’re holding high-growth tech or AI-heavy investments, consider placing them in tax-advantaged accounts like a Roth IRA. That’s where tax-free compounding can turn big potential into long-term wealth.

5️⃣ Keep your system automated.
Consistent, automated investing beats emotional, reactionary investing every single time. Keep your contributions steady, even when the market feels wild, and let time do the heavy lifting.

6️⃣ Stay long-term focused.
The winners of every tech revolution play out over decades, not headlines. You don’t need to predict who wins next quarter, you just need to stay invested, diversified, and emotionally grounded.

There’s a lot of BS financial advice out there but investing consistently in a bunch of different low-fee funds is timeless and still applies in the age of AI. Creating a system where you are investing and saving on auto-pilot is how you build wealth long-term and create a true stream of passive income.

👉 In my Beginner Investing Workshop, we’ll walk through how to build that system step by step, so you can invest with confidence, stay prepared for uncertainty, and grow wealth that outlasts every trend. [Save your seat →]

Bottom Line

You don’t need to predict the next Nvidia or panic-buy trendy stocks to benefit from AI. You just need to understand how your investments already connect to it.

Because real wealth isn’t built by chasing what’s new but by understanding the game and positioning yourself early, calmly, and confidently.

If you’re ready to do that, join my Beginner Investing Workshop.

👉 Reserve your seat now — don’t miss this one!