Peter Lynch's Views on AI Stocks

Peter Lynch Does Not Invest in AI Stocks

Respected investor Peter Lynch has announced that despite the recent surge, he holds no artificial intelligence (AI) stocks in his portfolio. Known for his successful career with the Fidelity Magellan Fund in the 1980s, Lynch expressed these views on 'The Compound and Friends' podcast.

Last month on the podcast, Lynch stated, "I have zero AI stocks in my portfolio. I couldn’t even mention Nvidia about eight months ago,” he said.

Lynch, who provided an average annual return of 29.2% during his 13 years at Fidelity, noted that he is carefully monitoring developments in the AI sector but refrained from discussing his current portfolio or preferred stocks.

When asked whether investors are overly following AI trading, Lynch’s response of "I don’t know," was striking. He emphasized the importance of fully understanding a company prior to investing in it as part of his investment philosophy, a topic he explored in depth in his book 'One Up on Wall Street.'

Lynch also attempted to reassure employees concerned about AI threatening jobs by stating, "This is a great country. We are creative," a sentiment that aligns with warnings from companies like Walmart and Accenture regarding the significant transformation AI could bring to the workforce.

Lynch’s stance on AI stocks stands out when considered alongside his impressive investment history. His decision not to invest amid the recent boom in the AI sector serves as a reminder of his investment philosophy that investors should not invest in a company or sector without a deep understanding of it.