AI Stocks Are Overpriced. The Next Big Growth Opportunity Could Instead Be in This Industry

Nvidia's $1.1 trillion valuation means investors are paying nearly 240 times earnings for a piece of the business. Amazon is a bit more expensive at $1.3 trillion, and it's price-to-earnings (P/E) multiple sits at 307. You could go for a "cheaper" option and invest in -- its market cap is around $850 billion, and its stock only trades at 87 times its trailing earnings.

You would need to be extremely bullish on the growth prospects of these companies to be willing to buy stock at those kinds of premiums. They may turn out to be good buys, even at those extremely high valuations. The worry when it comes to tech, especially artificial intelligence (AI), is that given the market rally this year in that sector, many of those stocks already have a ton of growth priced into their valuations.

If you want to invest in a sector where there may be excellent growth opportunities to take advantage of right now and where stocks are at much more manageable valuations, you should take a look at the healthcare industry.

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Source Fool.com