Don’t go all-in on Nvidia stock. Here’s how to play the AI trade now.

Subscribe to enjoy similar stories. The best strategy for buying the dip in artificial intelligence stocks isn’t going all in on Nvidia. It’s spreading your bets among a bunch of AI-exposed companies.

Yes, it has been a tough year for the AI trade. Chip stocks, software stocks, and even power stocks and shares of industrials that build out data centers have tumbled. Much of the decline is captured in the Nasdaq Composite, which is down 13% from its record close in December, while Nvidia, the engine that made the artificial-intelligence trade go, has fallen nearly 30%.

Even the S&P 500 utilities sector, home to a handful of companies that provide power for data centers, has dropped 5.8% from its high as they move in the same direction, if not with the same magnitude, of their tech brethren. The cheapening of AI stocks makes them look more attractive—but caution is warranted. While Nvidia is looking more attractive than it did two months ago, allocating all of one’s AI money to the company comes with the risk that it loses data center chip market share to the likes of Broadcom and Advanced Micro Devices.

But buying just those two would mean being exposed to the possibility that Nvidia continues to dominate and they never catch-up to the degree that the market expects. It doesn’t end there. Buying only Microsoft means accepting a company that analysts expect to see slowing sales growth this year, according to FactSet, which could further reduce its price/earnings multiple.

It also means ignoring other, less obvious companies that offer other types of AI software services that companies are just beginning to purchase. So what’s an investor to do? Buy them all. “Investors must increasingly consider risk management when it