Investors still have absolute confidence in AI, while I continue to accumulate cheap shares FTSE 100 index Stocks. So do I miss not joining the party?

peak cycle

I’m Making a Bold Call: Seven Wonders – Led by Nvidia – It will likely peak on October 29. That was the day the stock hit $5 trillion dead It warned that it would miss analysts’ profit expectations due to higher capital spending.

Three weeks later, Nvidia’s cash flows were also disappointing. So why are AI giants faltering?

Beyond the high valuations and limited real-world penetration, investors have begun to question certain business relationships, such as Nvidia’s backing of smaller AI companies that later spend heavily on its chips or cloud services.

Is the reckoning coming for the Seven Wonders? I think so. Classic boom and bust: overspending on new technology and partying like it was 1999. Meanwhile, cheaper FTSE 100 shares offer more established opportunities, paving the way for investors to explore more sustainable bets.

Fallen giant, rising potential

For me, one of the most compelling growth stories right now on the FTSE 100 is Diageo (LSE: DGE). I’ve been monitoring the company for years, but recently decided to get involved. Its brands are legendary – Guinness, Don Julio, Casamigos -And they retain a strong global appeal.

What excites me is the constant drive for excellence. Consumers may drink differently today, but they are still paying for quality. The company is adapting well, shifting its strategy to reflect changing habits, from at-home social media campaigns to ready-to-drink formats targeting younger audiences.

Risks still exist. Consumer spending may remain constrained, inventory cycles may persist, and global macro conditions may impact near-term performance.

But with a forward earnings multiple of just 13 – well below its long-term average – I feel the risks are largely accounted for. A 4.3% dividend is a bonus, but my focus is on strong brands, and a potential turnaround from a new, cost-conscious CEO. The reason I’m holding Diageo is because it now looks like a stock with room to run, which sets the stage nicely for my next pick.

Energy giant

for me, baby (LSE: BP.) is a notable contrarian opportunity to consider. Everyone is pessimistic about oil, but that is exactly why it is accumulative. Since recalibrating its strategy in February, scaling back costly renewable energy projects, the company appears more focused and disciplined.

Q3 results highlighted: Refining exceeded expectations, supported by higher realized margins and minimal shift activity.

Upstream, the project underway is impressive – 12 discoveries in 2025 alone, including the Boomerango discovery in Brazil, its largest discovery in 25 years.

Cash flow is strong, with operating cash flow comfortably covering the 5.6% dividend yield.

BP’s breakeven point is $40 per barrel. But if prices remain in the $60 range over the long term, the company could miss its ambitious financial targets, which could impact the stock price and shareholder returns.

Energy prices seem wrong today in my opinion. Geopolitical tensions, US domestic transportation, rising demand for electricity through artificial intelligence, and slowing electric vehicle adoption all support the case for oil and gas.

Bottom line

For me, the thrill is finding undervalued FTSE 100 stocks. While hype drives others toward expensive names, I focus on high-quality companies that trade cheap, offer long-term growth, strong earnings, and the potential for consistent wealth compounding over time.