Investing in AI stocks is the latest trend, but it's not for every investor. Over the past few years, investors (including myself) have been burned by hot trends like work-from-home or metaverse-focused stocks and sustained painful losses from some companies.

Applying this knowledge to other investment trends can keep you safe during this time of AI hype. So before you consider investing in an AI company, consider these topics.

Valuation is a key subject, as even the best company bought at the wrong price can be a disaster. When assessing Valuation, I always ask: "What kind of growth must this company sustain for this Valuation to make sense?" Applying this to popular AI stock Nvidia (NASDAQ: NVDA) is a worthy exercise, as it is a chief culprit in overpaying for a company that will significantly benefit from AI rollout.

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Source Fool.com