Young investors love AI stocks. Are they falling into a debt trap?

October 25, 2026 — 5:08am

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It was only earlier this month and here in this very column that I wrote about the importance of doing your research and seriously considering your appetite for risk before investing in the tech sector.

And as if right on cue, the market demonstrated exactly why people are increasingly recommending investors move with caution.

Over the course of a single week of trading last week, more than $US1 trillion ($1.43 billion) was wiped from the stocks of 20 of the world’s biggest semiconductor and AI companies. That sounds pretty bad, right? Well, skip to this week, and the share prices of many of those same companies were already enjoying a rebound.

Unlike more established investment industries, there is still a lot we simply do not know about where the AI train is headed, which is in part what makes it so volatile – and the potential rewards so appealing.

While for some seasoned investors riding this rollercoaster is simply part of the experience, two interesting things are taking place that make paying attention to this specific issue especially important, and worth me banging on about.

The first is that according to a new report from the ASX, more Australians are now investing than ever before. The second is that thanks to the hype surrounding the AI industry generally and the looming IPOs for two major artificial intelligence companies – Anthropic and OpenAI – many Australian investors, and specifically young investors with decades of portfolio time on their side, are seriously considering putting their hard-earned money into this sector.

Most analysts agree the AI industry overall is still solid, but........

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