AI Stocks Are Surging-But Volatility Could Be the Next Big Test

It’s hard to open your phone or turn on the news without hearing about AI. It’s the buzzword of the decade, and maybe of our lifetime. From chatbots and driverless cars to data centers and chip manufacturing, artificial intelligence isn’t just a tech trend anymore—it’s a full-scale market movement.

And while some investors are celebrating jaw-dropping gains, others are quietly wondering: how long can this last?

Stansberry Research’s Dan Ferris believes we’re still early—very early. He calls the rise of AI “the biggest wealth-creation event in human history.” But he also offers a sobering reminder: massive innovation often comes with massive volatility.

AI Will Touch Every Stock You Own

Ferris says AI will eventually “find its way into every stock in your portfolio.” The comparison to the internet is obvious—and accurate. Just as the web reshaped every industry in the 1990s, AI is already transforming how companies operate, hire, and compete.

Whether you own Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOGL), or even Costco (NASDAQ: COST), AI is already part of their growth story—improving efficiency, cutting costs, and opening new revenue streams.

That’s what makes this such an exciting time for investors, but it’s also what makes it unpredictable. When every company aims to be an “AI company,” not all will reach the finish line.

Booms Create Wealth; Bubbles Create Lessons

Ferris draws a familiar comparison to the dot-com era. Back then, investors poured money into anything with a “.com” in its name. The internet really did change the world—but many of those early companies didn’t survive long enough to see it happen.

The same pattern could unfold with AI. “Times of great innovation are always like that,” Ferris explains. The businesses building the foundation of this technology—semiconductors, data infrastructure, and software systems—may not see profits right away, but they’re laying the groundwork for the next generation of growth.

That’s why smart investors are looking at the builders of AI, not just the headline-makers.

Volatility Isn’t a Flaw—It’s the Feature

Markets move in cycles, and human behavior makes those cycles even sharper. When optimism takes over, stocks soar. When fear creeps in, they tumble. AI will be no exception.

Ferris warns that passive investing—automatic inflows into the largest S&P 500 names—can amplify that volatility. When investors start pulling cash out instead of pouring it in, “the algorithm reverses,” he says. That’s when the market gets wild.

In other words:

• Don’t mistake hype for stability. 
• Don’t assume today’s leaders will stay on top forever.
• And don’t chase returns that have already happened.

Volatility is part of the process. The trick is to be prepared for it, not surprised by it.

How to Invest in AI Without Getting Burned

Ferris’s advice for navigating the AI era is simple—but powerful:

Stick to fundamentals. Look for companies with real businesses, not just buzzwords.

Ask yourself:

• Do they generate consistent cash flow?
• Is their balance sheet strong?
• Do they have a product or service that’s truly essential?

If the answer to those questions is “yes,” that company has a better shot at thriving—even when the market pulls back.

Ferris also emphasizes the importance of diversification. Holding a mix of quality stocks, some cash, and even short-term Treasurys can give investors the flexibility to take advantage of future dips instead of fearing them.

Innovation Is Inevitable—Preparation Is a Choice

AI is already transforming the market—and probably your portfolio—whether you notice it or not. Expect dizzying highs and sharp corrections, just like during the internet boom.

But if history is any guide, the investors who come out ahead will be those who stay calm, stay curious, and stay invested in businesses built to last.

As Ferris puts it, “AI will touch every stock you own.” That’s not a reason to panic—it’s a reason to prepare. Because when innovation and volatility collide, opportunity follows for those paying attention.

Where Should You Invest $1,000 Right Now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

The article "AI Stocks Are Surging—But Volatility Could Be the Next Big Test" first appeared on MarketBeat.