Whether you like it or not, artificial intelligence (AI) is here to stay, and it’s only going to get bigger. So before it (potentially) steals your job, consider using the stock market to make money from it.

Like the dot-com bubble and previous bubbles, artificial intelligence is also likely to burst. But when this happens, clever investors will start snapping up inexpensive stocks before they rebound.

To consider MicrosoftFor example. At the height of the dotcom craze, he sold shares for nearly $40 apiece. After the break, they dropped to $12. It took some time, but by the end of 2014, prices were back above $40.

Those who bought at the high made almost no profit, but those who bought at the dip almost quadrupled their investment.

Is artificial intelligence the same?

Right now, AI stocks are trading at staggeringly high valuations amid the first-in-the-door craze. This may lead to unrealistic and unsustainable economic growth.

But even if the bubble bursts, the technology won’t disappear – stocks will simply become much cheaper. This is an opportunity. As AI implementations finally find real and profitable applications, the market should begin to recover.

Is this a likely scenario?

No one can really predict where the market is going. Even some of the most popular analysts have been wrong about stock market crashes in the past. It’s protected to say that today’s conditions do not accurately reflect the dot-com bubble. Still, it doesn’t hurt to be prepared, especially when the signs are there.

Consider the following:

• Artificial intelligence has pushed some huge US technology and chip stocks to very high valuations.
• It is concentrated in a miniature group of AI winners (large-cap platforms and semiconductor names).
• But unlike the year 2000, most AI leaders are already generating sturdy profits and sturdy cash flow.

So the main risk is concentration. If earnings or AI adoption disappoint, downgrades on several giants could hit the market tough.

What does this mean for UK investors?

The art is in choosing the right stocks. After the dot-com bubble, not all companies recovered. Think Compaq, Pets.com and 3dfx – all went bankrupt or were sold to competitors.

This increases the risk because no one can be sure who will survive. However, there is a clever way investors can take to reduce this risk – an AI-focused investment fund.

I grab a piece of the AI ​​pie

Polar Capital Technology Trust (LSE: PCT) is a fund that invests in shares of technology companies, in particular those focusing on artificial intelligence. The most critical farms include: Nvidia, Alphabet, TSMC, Broadcom AND SAMSUNG.

It is also one of the best performing companies listed on the UK stock exchange over the last decade. By some estimates, the cumulative total return over 10 years was 9,707% (an average of 58.18% per year).

This kind of turnaround happens once every ten years and is unlikely to happen again any time soon, but it suggests that the fund managers know what they are doing.

The only caveat is that it is highly concentrated in one country (US) and one sector (technology). This increases the high risk of losses if any major problems hit the US tech market.

Why I like it

The trust benefits from broad diversification in the technology sector, which eliminates the risk of loss on a single stock.

In tiny, UK investors can gain exposure to a potential AI rebound without having to spend months researching each company. So with a moderate continuous charging rate of just 0.77%, I think it’s worth considering bursting the AI ​​bubble.