Young investors chase AI boom despite tech stock volatility

Michelle Huynh made a promise to her parents when she was a teenager: she would become a millionaire by 30. It was, she admits now at 26, somewhat silly. But her parents had sacrificed everything as migrants to Australia, speaking little English, and the promise felt like a way to honor that. She is trying to make it real by betting her savings on technology stocks.

Huynh works in sales for a tech company and has come to see investing not as optional but as necessary. "Times are so different and investing has become a necessity," she says. "It feels like our purchasing power is shrinking. This is the only way to combat that." More than a third of her portfolio sits in tech stocks. By mid-July this year, that portion had surged 50 percent—a gain of about 16,100 pounds. Then the sector entered what she calls a "wild moment," and those gains compressed to around 22,000 Australian dollars. She says she is prepared for the swings, treating her bets as long-term.

Huynh is not alone. Across the United States, Asia, and beyond, young investors in their 20s and early 30s have rushed into technology stocks, drawn by the artificial intelligence boom and encouraged by social media, marketing, and the visible success of peers. The Nasdaq in the US has climbed roughly 10 percent this year. Japan's Nikkei 225 has risen more than 20 percent. But nowhere is the fervor—and the danger—more visible than in South Korea.

Seoul's Kospi index, heavy with tech giants like SK Hynix and Samsung Electronics, has jumped more than 50 percent since January. Local retail investors, known as "ants," have flooded into the market. U Chan Lee, a 30-year-old investor, observes that the appetite for stocks has become almost universal. "I could maybe count with my hands the number of people who aren't investing today," he says. "Even stay-at-home mothers, like my mum, who has never been interested in the stock market, are now interested." But the Kospi has experienced violent reversals. After hitting a record above 9,000 points in June, it plunged to around 6,500. Trading has been halted seven times this year under circuit-breaker rules designed to stop panic selling when the index drops 8 percent in a single session. The swings have alarmed authorities, who have begun restricting the use of borrowed money to buy stocks.

The volatility reflects a deeper anxiety among analysts: whether the enormous sums being poured into artificial intelligence—hundreds of billions by governments and corporations—will ever generate the profits needed to justify such valuations. Lale Akoner, an analyst at investment firm eToro, warns that retail investors often chase "optimistic outcomes" or "the most visible winners" without regard to actual profitability. They treat sharp declines as buying opportunities, testing their conviction with each dip, but they may not fully grasp "how painful valuation resets can be." The case of SpaceX illustrates the risk. Elon Musk's space and AI company listed in June at $135 per share, surged to $225, then fell back below its offering price as questions about profitability mounted.

Yet the allure persists. Jacqueline Choi, 28, from South Korea, regrets not investing more aggressively before the Kospi's rally. She was forced to sell Samsung and Hyundai shares when she needed cash and now wonders why she did not pour her entire savings into SK Hynix or additional Samsung stock. Some of her friends have done exactly that, investing thousands of dollars in hopes of outpacing their salaries. Shyan Lim, a 24-year-old business student in Singapore, has committed roughly three-quarters of his savings to tech stocks. In October, he invested about 13,185 pounds in Intel and Micron. Those positions are now worth roughly 57,000 pounds. "It feels like I'm one step closer to retirement," he says. "While I'm still young I think I can take the risk."

Not all young investors are equally exposed. Ayush Deb, 23, also from Singapore, keeps only about a third of his portfolio in technology. In June, his memory chip holdings fell more than 10 percent in a single day, and he watched investment forums fill with people discussing who had been burned. "I've ridden the highs and lows of tech stocks but the sector is quite hard to read," he says. He felt the pull of FOMO—fear of missing out—when SpaceX listed, but he has learned to avoid newly public companies until he has time to study them. Michelle Huynh, who creates finance content on social media, echoes the warning. "I think many young people are afraid of investing—and validly so. It can feel like gambling if you're not aware of what's going on." She has recently shifted some money into energy and metal stocks, betting they will benefit from the chip-manufacturing boom. The question hanging over all of them is whether the gains will hold or whether the market's conviction in artificial intelligence will eventually crack.