Artificial intelligence has shaken up the investing landscape since the groundbreaking launch of ChatGPT in November 2022.
Since then, investors have poured money into all things related to AI as they hunt for the next big winners. In 2023, a group of major technology players dubbed the Magnificent Seven — Tesla, Amazon, Meta Platforms, Apple, Microsoft, Alphabet and Nvidia — contributed to a large chunk of the market’s rally.
Those tail winds continued into 2024, but even the winners eventually reach their limit. Indeed, some of this year’s highest fliers came down to earth on Friday, with Big Tech names dragging down the Nasdaq Composite by more than 2%.
“You have to do your work,” said Jay Woods, chief global strategist at Freedom Capital Markets. “You want to do the research, you want to know what you’re buying, you want to know the risks involved. In AI right now, there are a lot of unknowns.”
AI is poised to be a central theme as the technology transitions from early-stage winners to second-stage adopters. Portfolio and wealth managers say investors may want to undertake certain strategies if they’re looking for long-term plays in the space.
What to look for
There’s no secret formula to investing and picking artificial intelligence stocks, but investors can keep an eye on certain metrics and trends when weeding out the winners from the duds.
When investing in any new industry, Carol Schleif, chief investment officer at BMO Family Office, recommends that investors keep an eye on companies’ cash burn and how they are spending their money. Be attentive to the fine details, including how a company works through a backlog and how much money it devotes toward infrastructure.
When it comes to chip stocks, Schleif also recommends taking a look at government grants. The industry won big in 2022 when President Joe Biden signed the CHIPS Act into law. The measure allocated funds toward building out semiconductor production on U.S. soil.
“Focus on the underlying fundamentals, and are they moving in the right direction, [rather] than just last quarter’s earnings,” Schleif advised.
Investors should also avoid blindly chasing the hot winners that have benefited from AI enthusiasm. For Laffer Tengler Investments CEO and CIO Nancy Tengler, that means looking at some of the old-economy stocks embracing the new digital wave. She likes Microsoft and IBM, a pair of tech industry veterans.
When building any portfolio, financial advisors and portfolio managers stress the importance of diversification — and the same applies to AI.
An exchange-traded fund might be a good way to get that diversified exposure to a basket of stocks that could benefit from the AI theme, rather than sticking with one or two promising names.
Consider diversifying through ETFs
Selecting ETFs that incorporate dozens of names can be a lower-risk way to diversify, said Marguerita Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.
“That’s one way to get some exposure without putting the proverbial all the eggs in that one basket,” said BMO’s Schleif. “You want to be able to focus on a few different avenues such that you can withstand the volatility.”
AI ETFs and their performance in 2024
Ticker
Name
Expense ratio
%chg ytd
BOTZ
Global X Robotics and Artificial Intelligence ETF
0.68%
0.53%
ROBT
First Trust Nasdaq AI and Robotics ETF
0.65%
-10.34%
AIQ
Global X Artificial Intellligence & Technology ETF
0.68%
0.90%
CHAT
Roundhill Generative AI and Technology ETF
0.75%
3.20%
Source: fund websites, FactSet
Volatility can be a bitter pill, particularly for newer investors. Stocks tend to rise at first when a new theme hits the mainstream, but often suffer at some point from volatility and pullbacks, said Helen Dietz, a CFP and managing director at Aspiriant.
“The newer the trend, the more volatile the trend,” she said. “The corrections of those individual stocks, or those sectors, can be quite violent at times, which is not unusual, and the investing public gets scared out of that.”
To that effect, Nvidia’s shares suffered a setback on Friday when they tumbled 10% and posted their worst day since March 2020. The decline put a sizable dent into the chip stock’s year-to-date gains, but it remains up nearly 54% in 2024. Fellow AI play Super Micro Computer also took a nosedive that day, dropping 23%.
ETFs typically include a range of names and can vary in weighting. Though the BOTZ ETF and the Roundhill Generative AI and Technology ETF (CHAT), both currently lag some of this year’s popular AI winners. However, the underlying names are varied: BOTZ holds Nvidia and robotics play Intuitive Surgical, while CHAT’s top holdings include Microsoft, Meta and ServiceNow.
Schleif recommends looking for ETFs with high trading volume and backed by reputable companies. Investors should also be mindful of fees, which can take a bite out of returns if they are too high.
While the gains may fall short of the surge seen in stocks such as Nvidia and Meta, ETFs allow investors to obtain lower-risk exposure to the sector, Woods said. Longer term, investors can also use the leadership in these funds to consider picking out individual names further down the road.
“The old cliché is timing the market and then hoping you find that individual stock that can really be the big performer,” Woods said. “If you want to be involved, you want to be diversified and I think an ETF is the best way to do that.”
The landscape of institutional debt markets is undergoing a profound structural shift on July 21, 2026, as major corporate issuers and commercial banks rapidly accelerate the deployment of tokenized debt instruments. Data published by leading capital market consortiums indicates that primary issuances of digital commercial paper and tokenized corporate bonds have reached record volumes this month. By moving legacy debt origination, underwriting, and secondary distribution onto permissioned distributed ledgers, corporate treasurers are unlocking unprecedented operational flexibility and instantaneous cross-border liquidity.
The adoption of tokenized debt is fundamentally altering how enterprise balance sheets manage short-term liquidity needs. Traditional corporate bond settlement cycles historically required multi-day clearing processes involving numerous intermediaries, custodial entities, and clearinghouses. Through programmable smart contracts on distributed ledgers, issuers can now execute atomic settlement—enabling continuous, 24/7 access to institutional capital pools. This instantaneous clearing mechanism drastically reduces counterparty risk, eliminates costly settlement friction, and allows treasury teams to dynamically optimize working capital in real time.
A major catalyst driving this institutional migration is the establishment of comprehensive digital asset regulatory frameworks across major financial hubs. Clear legal guidelines regarding ledger-based securities ownership have provided institutional compliance officers with the regulatory confidence necessary to transition multi-billion-dollar liquidity facilities onto digital platforms. Furthermore, the integration of automated regulatory reporting directly into token smart contracts simplifies ongoing compliance audits, ensuring that secondary market trades automatically enforce investor accreditation limits and tax withholding requirements.
For chief financial officers and institutional portfolio managers, tokenized debt represents a fundamental evolution in fixed-income strategy. Companies that embrace ledger-based debt structures gain direct access to a broader, global base of digital-native institutional investors while substantially reducing borrowing overhead. As ledger interoperability continues to improve across global exchanges, tokenized debt is poised to become the standard infrastructure for global corporate finance.
Private credit has firmly established itself as a foundational pillar of global financial markets in 2026, transitioning from an alternative asset class into a dominant mechanism for middle-market corporate financing. Reports published in mid-July 2026 show that direct lending assets under management have expanded significantly, as corporate borrowers increasingly bypass traditional syndication desks in favor of customized private debt solutions. This structural migration has fundamentally altered corporate liquidity dynamics, providing middle-market enterprises with reliable access to tailored capital packages even during periods of regulatory bank tightening.
The primary driver of this continued growth is the structural flexibility inherent in private debt agreements. Unlike public bond markets or conservative commercial bank loans—which often carry rigid covenants and slow underwriting timelines—private credit funds offer speed of execution, flexible payment-in-kind structures, and customized debt-service frameworks. For companies undertaking strategic acquisitions, capital expenditures, or complex balance sheet recapitalizations, the ability to negotiate directly with a unified syndicate of private lenders provides significant certainty and confidentiality.
However, the expansion of private credit is attracting heightened regulatory attention and risk scrutiny. Financial regulatory bodies are closely evaluating the lack of secondary market price discovery and the potential concentration of illiquidity risks within non-bank financial institutions. Because private debt instruments are held to maturity and marked to model rather than marked to market, evaluating real-time enterprise valuations during economic shifts requires robust internal credit assessment standards. Analysts note that as loan portfolios mature, performance variations between disciplined lenders and aggressive underwriters will become increasingly apparent.
For corporate financial officers and institutional portfolio managers, private credit represents both a powerful strategic tool and a vital diversification strategy. Borrowers must weigh the higher nominal coupon rates of private debt against the tangible value of operational flexibility and execution certainty. Meanwhile, investors must maintain rigorous credit due diligence, prioritizing funds with proven restructuring capabilities and deep operational expertise in underwriting resilient middle-market businesses.
The integration of blockchain technology with legacy financial markets has reached a decisive tipping point in July 2026, driven by the rapid scaling of Real-World Asset (RWA) tokenization. Major global investment banks, custodial entities, and asset managers are actively shifting sovereign debt, commercial paper, and private fund shares onto permissioned distributed ledgers. Recent industry data confirms that the aggregate market capitalization of tokenized treasury products and private credit funds has surged past major milestones, illustrating that ledger-based settlement is no longer experimental, but core financial infrastructure.
The fundamental value proposition of asset tokenization rests on operational efficiency, continuous liquidity, and automated compliance execution. By embedding regulatory checks, investor accreditation limits, and automated coupon distributions directly into smart contract code, financial institutions eliminate vast amounts of manual back-office reconciliation. Furthermore, fractionalized ownership structures allow high-value asset classes—such as prime commercial real estate and private equity funds—to be split into accessible units, significantly expanding liquidity pools and enabling real-time collateral optimization.
A key catalyst behind this institutional momentum is the establishment of comprehensive regulatory clarity across major financial jurisdictions. The implementation of standardized digital asset frameworks in the United States and Europe has provided institutional compliance officers with the legal certainty required to deploy capital on-chain. As a result, premier custodian banks are now offering unified digital asset custody, seamlessly bridging traditional securities depositories with programmable ledger ecosystems.
Looking forward, the maturation of tokenized assets will continue to transform secondary market trading and treasury management. Corporate treasurers can now yield-optimize idle cash in real time by moving into tokenized money market instruments that settle instantaneously on a 24/7 basis. To remain competitive, financial leaders must ensure their institutional architectures are interoperable with modern digital ledger protocols, positioning their organizations at the forefront of modern capital market efficiency.
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