The Ways in Which Small and Large Investors Pick AI Winners

Investors are increasingly searching for smart ways to navigate what could be a cooling job market and a pullback in consumer spending. At the same time, retail traders are reassessing how they approach the fast-moving world of AI-related stocks.

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‘Worldwide Exchange’ Stock Pick: Costco

Lee Baker, founder of Claris Financial, remains optimistic about Costco Wholesale Corp. (COST) even though the stock has stayed mostly flat this year. He believes the warehouse retailer could actually benefit if the labor market softens and consumer spending tightens.

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“When people have less disposable income, they start thinking harder about how to stretch every dollar,” Baker explained. “That’s where Costco shines. The Kirkland Signature brand offers great quality at a lower cost, and buying in bulk helps shoppers save over time. Even if it means driving a bit farther, consumers are willing to make that trip for long-term savings.”

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Baker also highlighted Costco’s membership-based business model, which continues to deliver strong loyalty with a renewal rate near 90%. He sees that steady base of recurring revenue as a key strength that helps the retailer weather economic slowdowns better than most.

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Spotlight on AI Investing: Finding the Real Winners

Artificial intelligence remains one of the most talked-about investment themes of the year but recent commentary has sparked new debates about how sustainable the AI rally truly is and which companies will emerge as lasting leaders.

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Orlando Bravo, founder of private equity firm Thoma Bravo, told CNBC this week that AI valuations are looking “frothy,” describing parts of the market as being in bubble territory. Meanwhile, a recent report from The Information questioned how profitable Oracle’s cloud segment really is, casting some doubt on the broader AI enthusiasm.

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Despite these concerns, some investors still see plenty of long-term opportunity in the space. Maja Vujinovic, CEO of FG Nexus, emphasized that AI is still in its early stages of growth and urged investors to focus on fundamentals when picking stocks.

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“You should look for companies that have real-world use cases, meaningful scale, tangible utility, and long-term impact,” she said. “If they’ve also built the right infrastructure to support that growth, then those are the names worth getting excited about.”

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Retail Investors Stay in the AI Game But Are Getting Pickier

According to Joe Mazzola, head of trading and derivatives at Charles Schwab, retail investors remain engaged with the AI trade but are becoming more discerning about where they put their money.

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“I think the clear line now is who’s actually monetizing AI and who the clear leaders are,” Mazzola said. “Investors are starting to focus on companies that have proven business models and solid revenue streams tied to AI rather than just hype.”

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Mazzola noted that Schwab clients were net buyers of Nvidia, CoreWeave, Oracle, and Palantir during September, while they trimmed positions in AMD and Broadcom. Interestingly, these moves came before the latest headlines involving AMD’s potential partnership with OpenAI and new reports concerning Oracle’s cloud business.

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This shift suggests that retail traders are still enthusiastic about artificial intelligence but are moving away from blanket enthusiasm and toward a more selective, fundamentals-based approach.

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Takeaway

Both the consumer and technology sectors are showing how investors are recalibrating their strategies in response to changing economic and market conditions. On one hand, companies like Costco appeal to those preparing for tighter household budgets, offering a value-driven model that thrives when shoppers focus on essentials. On the other hand, AI remains a long-term growth story but one that’s entering a new phase where investors must separate genuine innovation from overvaluation.

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In essence, the market’s message is clear: whether it’s bulk buying at Costco or betting on the right AI stocks, smart investing today means being selective, disciplined, and focused on real-world value.

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