Investors use dotcom era playbook to dodge AI bubble risks

STORY: Some major investors are spooked by AI exuberance, yet they are wary of betting against it.In order to protect themselves, they are shifting from hyped-up stocks into potential next-in-line winners.It's reviving a strategy from the 1990s dotcom era that helped some sidestep the crash.U.S. stocks have hit successive records and AI chipmaker Nvidia's valuation has surged beyond $4 trillion.Now some professional investors have been trying to find ways to make money from the bull market while avoiding excessive risk.Some are looking back to the 1990s internet boom, which spread from startups to telecoms and tech.And where hedge funds rode the wave by flipping out of highly-valued stocks before they peaked.While picking others that had room to rise.One asset manager speaking to Reuters highlighted signs of irrational exuberance on Wall Street.Such as frenzied trading in risky options pegged to the share prices of big AI stocks.But they added that they hoped to bank gains via bets on reasonably valued assets that might rally next.And that this involves trying to find growth opportunities that so far the market has failed to spot.With moves into software groups, robotics and Asian tech.Other investors also expect to edge out of Wall Street's Magnificent Seven stocks after shares in Nvidia more than tripled in two years.But they still want to keep their diversification within the AI sphere.

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