Afraid of an AI Crash? These 3 Safer Plays Could Protect Your Portfolio.

Core Insights - Investor enthusiasm for AI stocks has significantly influenced stock market gains in 2025, but concerns about a potential AI crash are rising among global investors, with 57% citing "tech valuations plunge/AI enthusiasm wanes" as the biggest risk to market stability in 2026 [2][6] - The Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ) has seen a 29% increase over the past year, outperforming the S&P 500 index, which rose by 13.6%. However, after reaching a peak of $53.75 on November 3, the ETF experienced an 11% decline by November 21 and remained approximately 2% below its high as of January 22 [2][6] Investment Strategies - To mitigate risks associated with a potential AI downturn, investors are advised to consider value stock ETFs, such as the Vanguard Value ETF (NYSEMKT: VTV), which includes 312 stocks with only 7.8% in technology, providing diversification [5][6] - The Vanguard Value ETF's top holdings include JPMorgan Chase, Berkshire Hathaway, ExxonMobil, Johnson & Johnson, and Walmart, none of which are heavily invested in AI. The ETF has a low expense ratio of 0.04%, a 9.9% earnings growth rate, and a price-to-earnings ratio of about 21, lower than the S&P 500's P/E ratio of 31 [6][7] - Another strategy to reduce exposure to AI risks is investing in small-cap stock ETFs, which typically have limited exposure to AI and are valued at lower multiples compared to major tech stocks, potentially offering opportunities for future growth [8]