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Founded in 1993, The Motley Fool is a financial company committed to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investment solutions, free Fool. com recommendations, and market analysis. top-notch podcasts and the Motley Fool Foundation, a non-profit organization.
Generative synthetic intelligence (AI) has been a game-changer for businesses around the world, and many AI-related movements have crushed the market. Perhaps the most famous is Nvidia, which has grown by 233% in the last year alone. Investors shouldn’t fill their portfolios solely with AI stocks.
Over time, a diversified portfolio generates the most productive effects, and to achieve this, you don’t want to give up maximum returns. For example, you might not realize it, but a lot of clothing stocks are getting incredibly good results lately. The industry has faced many demanding situations in recent years, coupled with changing trends and inflation, but it is now expanding.
Companies like The Gap (GPS 3. 85%), American Eagle Outfitters (AEO -0. 69%), Abercrombie
These companies are leading fashion retailers, and fashion is back in fashion. Trends had shifted towards basics and athleisure at the start of the pandemic, and office wear was abandoned. Nowadays, office wear is making a comeback, but the main update is in fashion. ; People care how they look.
The Gap has recently gone through a series of CEOs, culminating in the hiring of Richard Dickson, who stepped down as Mattel’s chief operating officer last year. He is credited with much of the toy company’s turnaround, and so far, it looks like it could revive sales. in breach.
Something that has been different so far during his tenure is the advancement of a strong focus on Gap’s four brands: Gap, Old Navy, Banana Republic and Athleta. Gap gained market share in 2023 and saw a 1% increase in sales.
American Eagle Outfitters, a youth favorite, has shown great functionality despite inflation. Sales were up 12% year-over-year in the fourth quarter of fiscal 2023, which ended Feb. 3. Their women’s logo, Aerie, has been a hit, and it provides opportunities. Management sees what it calls a “clear path” to a profit of about $6 billion over the next 3 years, up from $5. 3 billion in 2023.
Urban Outfitters and Abercrombie
Another point to keep in mind is that the more you understand what a company does, the better your chances of getting lucky if you decide to invest in it.
If you’re buying AI stocks in the process of ending just because everyone else is doing so, or even because they’ve recently skyrocketed, you run the risk of picking those with weak fundamentals, or buying and promoting at the wrong time. A greater understanding of AI generation and the strength of a company’s business will know which ones can generate long-term pricing and when it might be time to sell. Investors who don’t may also simply buy such stocks as they approach their peak, and end up wasting investments.
If clothing or fashion is more important to you, this can be a much bigger investment for you. If you know where everyone else is buying, it could make you a better candidate for the company’s investment thesis that some Wall Street analysts can’t offer. .
Choosing a high-growth tech stock organization, as well as other stocks you know and love, can lead to successful long-term investing, and trendy stocks are gaining traction right now.
Jennifer Saibil holds a position in any of the stocks mentioned. The Motley Fool recommends American Eagle Outfitters. The Motley Fool has a disclosure policy.
Market knowledge driven through Xignite and Polygon. io.