AI Fever

One of the biggest stories of 2025 has been the surge in investment and enthusiasm surrounding artificial intelligence (AI). Broadly defined, AI refers to computer systems capable of performing tasks that typically require human intelligence. While computers have existed for decades, they were historically limited to carrying out specific, pre-programmed instructions. The new generation of AI systems, by contrast, can learn, adapt, and respond — mimicking aspects of human behavior such as creative thinking, complex decision-making, and environmental awareness.

For those who have experimented with early AI tools, the experience can be both exciting and unsettling. These systems can generate answers almost instantly, often with impressive accuracy — though errors still occur. Enthusiasm for AI is largely driven by its potential to enhance productivity and efficiency across countless industries. Yet, concerns remain about privacy, regulation, and the potential displacement of human workers. For now, we are only beginning to understand how transformative this technology may be. Personally, AI reminds me of those once “far-fetched” science fiction films I watched as a kid — like 2001: A Space Odyssey — which now feel less like fiction every day.

Not everyone shares the same optimism. In April 2025, the Pew Research Center surveyed both AI experts and the general public on how they expect AI to affect the U.S. over the next 20 years. While a majority of experts believe AI will have a positive impact, most U.S. adults predict an overall negative effect on society.

Only time will tell how this new technological revolution will unfold — and how deeply it will reshape our lives. What’s clear today is that financial markets have embraced the potential, with technology stocks leading strong performance through 2025. Companies remain optimistic about the long-term productivity benefits of AI, and investors are expressing that optimism with their dollars.

As always, while markets experience powerful trends, our focus remains on maintaining balanced, diversified portfolios. Regular rebalancing back to target allocations helps manage risk, even as innovation and enthusiasm drive new market opportunities.