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The tech-heavy Nasdaq Composite has recently declined as investors reassess the valuations of artificial intelligence (AI) stocks following a strong performance earlier in the year. This sell-off highlights a distinction between genuinely promising AI investments and those that may be overvalued. Microsoft is viewed as a stable option for long-term AI growth, while Palantir Technologies faces greater risk if AI spending decreases. Investors are navigating this shifting landscape to identify opportunities amid volatility.
