AI stock rally may be driven by fear of missing out, but strategists say hold tight

Group 1 - Global equities are at persistent highs, with the European Central Bank warning of vulnerabilities due to concentration among a small group of U.S. hyperscalers, including Nvidia, Alphabet, Microsoft, and Meta [2][3] - The ECB's Financial Stability Review indicates that current market pricing does not reflect elevated vulnerabilities and uncertainties, suggesting that investor optimism may be driving valuations [3][4] - Differentiation across specific sectors is crucial, as some companies are experiencing increased share prices without generating earnings, particularly in quantum computing [4][5] Group 2 - The review highlights that while some valuations may be influenced by fear of missing out (FOMO), others are supported by strong earnings growth, emphasizing the need for careful analysis [3][5] - Strategists believe there is still real value in certain AI-related investments despite the presence of FOMO in the market [3][4] - The current market environment reflects a mix of optimism and tangible results, necessitating a focus on companies that deliver on growth [4][5]