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Resist AI FOMO - Stick With Your Long-Term Plan

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  //stocks-investing.news-articles.net/content/202 .. sist-ai-fomo-stick-with-your-long-term-plan.html
  Published in Stocks and Investing on Friday, November 21st 2025 at 9:45 GMT by Seeking Alpha

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Resist AI FOMO – Stick With Your Long‑Term Plan

Artificial Intelligence (AI) has become the headline of every business news outlet, every earnings call, and every investment newsletter. When a technology that can learn, reason, and generate content is put on the market, it feels inevitable that the next “big thing” will be the result of that technology. The Seeking Alpha piece “Resist AI FOMO, Stick With Your Long‑Term Plan” (published 17 Oct 2023) lays out a clear, pragmatic case for why the hype around AI should not derail a disciplined, long‑term investment strategy.

1. The AI Hype Cycle and FOMO

The author starts by describing the classic hype cycle: an initial “technological boost” followed by “peak of inflated expectations,” then a “trough of disillusionment” before the technology finally reaches “plateau of productivity.” AI has certainly passed the inflated‑expectations phase. We’re seeing surging prices for Nvidia’s GPUs, Google’s Alphabet, Microsoft’s cloud division, and even newer AI‑focused ETFs like the Global X Artificial Intelligence & Technology ETF (AIQ). Yet the article reminds us that hype does not equate to sustainable, long‑term returns. The author’s key takeaway is that investors should not let Fear Of Missing Out (FOMO) override a rational, fundamentals‑based approach.

2. What AI Can Deliver for Companies

While the article cautions against chasing the headline, it also explains why AI is indeed a legitimate growth driver:

The article notes that the cost‑effectiveness of AI is still being proven. While the upfront investment in data pipelines and GPU clusters can be hefty, companies that successfully embed AI into their core operations may see cost reductions of 20‑30 % and revenue lift in the single digits on a per‑year basis.

3. The Big AI Names: Opportunities & Risks

Seeking Alpha’s article points to the biggest AI names that have surged in the past year:

The author explains that while these companies have clear AI narratives, their current price multiples often ignore the real valuation of their AI capabilities. For example, a 70x P/E on Nvidia might reflect expectations that AI will keep the GPU demand sky‑high for the next 5–7 years. That is a gamble, especially given that software now can outperform hardware in many AI use‑cases.

4. Diversification and AI as a Portfolio Component

The article’s core advice is to treat AI as one component of a diversified portfolio rather than the entire investment thesis. Here are the concrete steps suggested:

1. Define Your Core Holdings – Blue‑chip, low‑beta, dividend‑paying equities that provide a stable base.
2. Add a Growth Layer – Allocate a smaller portion (e.g., 10–15 %) to high‑growth, high‑valuation AI names or ETFs.
3. Use AI ETFs for Exposure – The article recommends looking at ETFs that spread risk across multiple AI players (e.g., ARKK, AIQ). It cautions that many of these funds are concentrated in a handful of names.
4. Risk Management – Set stop‑losses or use dynamic asset allocation to pull back when valuations exceed historical norms.

The author uses an illustrative portfolio: 70 % core, 20 % high‑growth, 10 % fixed income. The high‑growth slice would include a mix of AI giants and mid‑cap innovators, but not be over‑leveraged on any single stock.

5. Evaluating AI Stocks – A Fundamental Lens

The article provides a short checklist for assessing AI‑related companies:

• Competitive Advantage: Does the company have a moat (e.g., proprietary data, scale, network effects)?
• Pipeline: Are there clear, near‑term products or services driven by AI?
• Cost Structure: Are AI investments expected to lower marginal costs?
• Regulatory Environment: Could antitrust or privacy laws limit growth?
• Management Track Record: Has the leadership successfully executed AI initiatives in the past?

The author emphasizes that high valuations are only justified if the company has multiple of these advantages. A single AI‑projected revenue stream is not enough to justify a 70x P/E.

6. Why Timing Is Not the Issue

One of the most reassuring points is that timing is not the only factor. AI adoption is a long‑term process: data labeling, algorithm training, and integration into business processes can take years. Hence, a short‑term “AI bubble” could burst, but the underlying value proposition may still materialize over a decade. The article stresses that investors should align with this horizon.

7. Bottom‑Line Takeaway

The Seeking Alpha article wraps up with a straightforward message: “Resist the AI FOMO. Stick to your long‑term plan.” The rationale is simple yet powerful:

• Avoid overvaluation by not chasing high‑beta AI names.
• Maintain diversification to mitigate the risk of any single AI story collapsing.
• Use AI as a growth engine, not a substitute for fundamentals.
• Stay patient – AI will eventually deliver, but it may take time.

8. Follow‑Up Resources

The article references several additional resources for readers who want to dig deeper:

• Federal Reserve AI Regulatory Brief – An overview of potential antitrust concerns for AI conglomerates.
• McKinsey “The State of AI in 2023” – A sector‑by‑sector assessment of AI maturity.
• ETF Fact Sheet – AIQ – Provides a detailed breakdown of holdings and sector exposure.

Each of these links gives a broader context to the points raised in the article, reinforcing that AI is a tool, not a ticket.

In Summary

The “Resist AI FOMO, Stick With Your Long‑Term Plan” article is a timely reminder that the excitement around AI should not eclipse the principles of value investing. By treating AI as one of many growth vectors, applying rigorous fundamentals checks, and staying diversified, investors can capitalize on AI’s potential without falling prey to the short‑term volatility that fuels FOMO. The message is clear: Keep your eyes on the long‑term horizon, and let the data—not the hype—drive your decisions.