The field of Artificial Intelligence (AI) is experiencing a boom, with many AI-related stocks soaring in recent times. But is now the right time to jump in, or

Riding the AI Wave? Citi Suggests Taking Profits and Strategic Options


blog post cover photo

Image credit: Gerard Siderius

The field of Artificial Intelligence (AI) is experiencing a boom, with many AI-related stocks soaring in recent times. But is now the right time to jump in, or should you be considering taking profits? Here's a breakdown of Citi's recent recommendations regarding AI stock trading:

Citi Advises Profit-Taking on High-Flying AI Stocks

According to Citi analysts, investor sentiment towards AI stocks is currently at its highest point since 2019. This surge in enthusiasm has them advising investors to consider taking profits, particularly on "high-fliers" within the AI sector.

The "Enabler" Category: A Prime Target

Citi specifically highlights the "enabler" category of AI stocks as a prime target for profit-taking. These "enabler" stocks are companies that provide the technological infrastructure and tools that power AI applications. Examples might include semiconductor companies that manufacture the chips used in AI hardware.

Beyond Profit-Taking: Strategic Options

For investors who are more cautious about the current AI market climate, Citi offers alternative strategies. One suggestion is to reinvest profits taken from high-flying AI stocks "more broadly across the theme's value chain." This would involve diversifying your portfolio within the AI sector, spreading risk and potentially capturing opportunities in different areas of AI development.

The AI Hedge Basket: A Defensive Tactic

For those seeking a more defensive approach, Citi proposes the "AI Hedge Basket." This basket is designed to benefit from a potential decline in AI stocks. It prioritizes companies with negative correlations to high AI exposure stocks, essentially acting as a hedge against potential losses in the overall AI market.

Remember, You're at the Helm

While Citi's recommendations offer valuable insights, it's crucial to conduct your own research before making any investment decisions. Consider factors like individual company financials, the competitive landscape within the AI sector, and your own risk tolerance.

Insider Scoop Alert! Track Smart Money with Real-Time Data

Staying informed about the latest market trends is important. The Financial Modeling Prep (FMP) Insider Trades RSS feed can be a valuable tool in this regard. This feed provides real-time updates on insider trading activity by institutional investors and corporate insiders. By tracking these trades, you might gain insights into what "smart money" is up to and potentially identify upcoming trends in the AI technology sector.

The Final Word: Be a Savvy Investor

Don't be swept up by the hype. Conduct your own research, analyze the AI market, and consider different strategies before investing. The FMP Insider Trades feed can be a helpful tool, but remember, the ultimate responsibility for your investment decisions lies with you.

Ready to Dive Deeper into AI Investing?

Explore the Financial Modeling Prep Insider Trades RSS feed and see how it can empower your investment research: link to Financial Modeling Prep Insider Trades RSS feed.

Other Blogs

Nov 25, 2023 6:39 AM - Parth Sanghvi

DCF Valuation vs. Comparable Companies Analysis: Choosing the Right Valuation Method

Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...

blog post title

Dec 23, 2023 2:19 AM - Parth Sanghvi

Understanding the Limitations of DCF Analysis: A Guide to Overcoming Challenges

Introduction: Discounted Cash Flow (DCF) analysis stands as a cornerstone in valuing investments, yet its efficacy is contingent upon various assumptions and methodologies. While a powerful tool, DCF analysis comes with inherent limitations and challenges that investors must acknowledge to make i...

blog post title

Dec 25, 2023 2:28 AM - Parth Sanghvi

Integrating Sustainability into Valuations: Navigating ESG Factors within the Discounted Cash Flow (DCF) Model

Introduction: The investment landscape is undergoing a profound shift with a heightened emphasis on sustainability and responsible investing. In this blog post, we explore the intersection of Environmental, Social, and Governance (ESG) considerations within the Discounted Cash Flow (DCF) model, h...

blog post title


Financial Modeling Prep API provides real time stock price, company financial statements, major index prices, stock historical data, forex real time rate and cryptocurrencies. Financial Modeling Prep stock price API is in real time, the company reports can be found in quarter or annual format, and goes back 30 years in history.
2017-2024 © Financial Modeling Prep