AI trade is now strictly ‘fundamental’: Strategist

As the Magnificent Seven mega-cap stocks experience heightened volatility, Schwab Asset Management CEO and Chief Investment Officer Omar Aguilar joins Yahoo Finance Live to provide insight into how investors should navigate their portfolios during this period. Aguilar highlights a notable shift in the mega-cap tech sector, transitioning from being "a momentum trade to a fundamental trade" due to fading AI hype. He emphasizes that for these companies to deliver on future expectations, they will require significant capital expenditure and research and development investments. As expectations for these stocks remain elevated, "investors are questioning" whether the current levels of gains can be sustained over the long term. With the highly anticipated Consumer Price Index (CPI) data set for release Tuesday, Aguilar advises investors to "expect more volatility." However, he suggests that investors should view this volatility as an opportunity to rebalance their portfolios and strategically position themselves for evolving market conditions. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Angel Smith