What is the difference between FOMO and FEMO? New investment psychology attracting attention due to AI stock boom

[Summary]

Investors often use the terms "FOMO" and "FEMO" when AI stocks and semiconductor stocks are on the rise.

FOMO is

Fear Of Missing Out
fear of missing out

It means.

On the other hand, in the recent market context, FEMO is

Fabulous Earnings Momentum
great performance momentum

The way it is used to refer to is noticeable.

In other words, FOMO is the psychology of buying in a hurry because everyone else is buying. FEMO's view is that ``sales and profits are actually increasing, so we don't want to miss out on business growth.''

However, this is where things get a little tricky. FEMO is sometimes explained as "Fear of Missing Earnings," but in the context of the AI ​​stock boom and the U.S. stock market, FEMO is increasingly being referred to as "Fabulous Earnings Momentum," as used by Ed Yardeni of Yardeni Research.

FEMO seems healthier than FOMO. In fact, there is a basis for this in performance.

Still, if you buy stocks with good performance at too high a price, you won't easily get returns. What is important in the AI ​​market is to look at whether there is enthusiasm or performance, and to what extent that performance has already been factored into the stock price.

Difference between FOMO and FEMO

First, let's clarify the two words.

Roughly speaking, FOMO means "not wanting to be left behind." FEMO "does not want to miss out on business growth."

Although they are similar, the starting point for investment decisions is different.

What is FOMO?

FOMO stands for Fear Of Missing Out.

In Japanese, it is translated as "fear of missing out" or "anxiety of being left behind."

In investing, the process is as follows:

Stock prices soar
↓
Become a hot topic in the news and on SNS
↓
Increase in reports of profits from those around you
↓
I feel like I'm the only one who doesn't have it
↓
Buy without researching carefully

The problem is that the reason people buy something is not because they understand it, but because they don't want to be left behind.

Investor.gov, an affiliate of the US SEC, also warns investors not to let FOMO affect their long-term plans. This is a mentality that is especially likely to occur with highly topical investments such as crypto assets, meme stocks, and AI stocks.

Situations where FOMO is most likely to occur

FOMO is stronger when prices move and information spreads quickly.

Representative examples are as follows.

• IT bubble
• virtual currency boom
• meme stock boom
• SPAC boom
• AI stock boom
• Rapid rise in semiconductor stocks

Especially in the age of social media, it is easy to see only the interests of others.

You can see the profit report of the person who bought it.
It's hard to see the silence of those who lost

This increases FOMO.

When the market is going up, it feels like you're the only one at fault. However, in reality, there are times when the decision to "not buy at a high price" is correct.

What is FEMO?

FEMO is used as an abbreviation for Fabulous Earnings Momentum in the context of recent US stocks and AI stocks.

In Japanese,

great performance momentum

It is.

If FOMO is the psychology of ``I want to buy stocks because the stock price is rising,'' FEMO is the mentality that ``I want to buy stocks because corporate profits are really increasing.''

The flow is like this.

Demand for AI will increase
↓
Data center investment increases
↓
Demand for GPUs, semiconductors, and network equipment will increase
↓
Sales and profits will increase
↓
Analysts' earnings forecasts rise
↓
stock price goes up

In this case, the reason for the stock price increase is more than just atmosphere.

This is due to upward revisions to sales, profits, guidance, and EPS forecasts.

Differences from “Fear of Missing Earnings”

Some texts describe FEMO as "Fear of Missing Earnings."

As for the meaning,

Fear of missing out on profit growth

That's the nuance.

This is an easy-to-understand expression to explain investment psychology in Japanese. However, strictly speaking, FEMO, which is a hot topic in the AI ​​stock/US stock market in 2026, is mainly a case that is talked about as "Fabulous Earnings Momentum."

This article will be organized as follows:

The important thing is to understand FEMO not just as a fear, but as a view that ``performance is pushing up the market.''

Why FEMO is attracting attention due to the AI boom

What makes the AI market somewhat special is that there are companies that have actual numbers, not just themes.

For example, NVIDIA announced its fiscal year 2027 first quarter results on May 20, 2026, with sales of $81.6 billion, an 85% increase compared to the same period last year. Data center sales were also $75.2 billion, an increase of 92% year over year.

This is not just a story about "AI becoming popular."

In fact, data center investment is increasing, and demand for GPUs and network equipment is reflected in corporate performance.

Looking at these numbers, it's natural for investors to think:

This is not just an expectation
Profits are really growing
If so, there is a basis for the rise in stock prices.

This feeling is FEMO.

FOMO and FEMO in AI stocks

Even when buying the same AI stock, FOMO and FEMO have different contents.

FOMO investor

stock prices are rising
↓
often seen on the news
↓
Also talked about on SNS
↓
I feel like if I don't buy it now I'll be late.
↓
purchase

In this case, the deciding factors are price and topicality.

If a stock goes down after you buy it, it's easy to lose track of why you're holding it. This is because the evidence is weak.

FEMO investor

Demand for AI is growing
↓
sales are increasing
↓
High profit margin
↓
The outlook for the company is also strong.
↓
There is a certain basis for the rise in stock prices.

This is looking at performance.

However, there are pitfalls for FEMO investors as well.

Good business performance and low stock prices are not the same thing.

In the actual market, FOMO and FEMO mix.

Real market prices cannot be divided neatly.

It starts with FEMO.

good financial results
↓
Upward revision of earnings forecasts
↓
stock price rise

However, as stock prices continue to rise, FOMO begins to appear.

everyone is making money
↓
I don't have it alone
↓
it might be too late
↓
I still buy it

At this stage, even good company stocks can rise too much.

In the market, the "performance market" and the "expected market" often overlap. People buy it because the numbers are good. Since people are buying it, expectations grow even more.

Now comes the difficult part.

Consider NVIDIA as an example

One of the most iconic companies in the AI boom is NVIDIA.

From FEMO's perspective, NVIDIA is an easy-to-understand stock.

Expanding the use of generative AI and inference AI
↓
Increase in AI data center investment
↓
Increased demand for GPU and networking products
↓
Rapid expansion of data center sales
↓
Rapid increase in profits

In fact, in NVIDIA's first quarter financial results for fiscal year 2027, sales, data center sales, and profits increased significantly.

This is FEMO material.

On the other hand, there is also the FOMO perspective.

Stock price is strong
↓
It is talked about every day as a central stock in AI.
↓
I feel anxious about not having it.
↓
Prioritize participation over price

Just because it's a good company doesn't mean it's safe.

If the market has already priced in high growth, even a slight decline in the outlook in the next earnings report can lead to a sell-off. Since AI stocks have big dreams, expectations tend to be high.

4 numbers you want to check on FEMO

If you want to invest based on FEMO, there are at least some numbers you should check.

Additionally, we also look at stock valuations.

• What is the PER?
• Are EPS forecasts rising?
• How many years does this growth continue?
• What about competition and supply constraints?
• Will customers continue to invest in AI?

It is not enough to ``buy FEMO because it performs well''.

To be exact,

good performance
↓
Its growth exceeds market expectations
↓
Moreover, it is not factored into the stock price too much.

This is what I want to see.

Mistakes that beginners often make

I buy it because it's going up.

This is classic FOMO.

If you buy only based on market momentum, you won't know what to believe in when the market goes down.

I think it will definitely go up because of its good performance.

This is the pitfall of FEMO.

Stock prices are based on future expectations, not current performance.

Even if the financial results are good, if the results are not as good as expected, the stock may be sold. The numbers are good. However, market expectations were even higher. This pattern is common in AI stocks.

Judging only by SNS

SNS is convenient for seeing the temperature.

However, it is dangerous to place it at the center of investment decisions.

A mix of profit reports, hype, clipped information, and short-term posts. It often doesn't match your financial resources, time horizon, or risk tolerance.

Invest your living funds

When FOMO becomes strong, the amount of investment becomes too large.

Destroy your daily life defense fund, borrow money to buy things, focus your NISA allowance too much on one theme. In this case, even a slight drop in the market will affect your life and mental health.

Fund management comes first before whether or not to ride the AI market.

Useful ideas for investing

When you feel FOMO, it's easier to calm down by asking the next question.

Why do you want to buy this stock now?

The answer is

Because everyone is buying it
Because it's a hot topic in the news
Because I don't want to be left behind

If so, there's a good chance you're suffering from FOMO.

The answer is

Sales are increasing
High profit margin
Company prospects are strong
Market expectations have been revised upwards
Still, the valuation is within an acceptable range.

If so, the decision is close to FEMO.

However, the last thing to look at with FEMO is the price.

No matter how good a company is, returns will be reduced if the purchase price is too high.

Diagram: FOMO and FEMO judgment axis

Summary

FOMO and FEMO are both terms that come up during bull markets.

However, the contents are quite different.

In the AI market, people sometimes say, "This is FEMO, not FOMO."

In fact, for companies like NVIDIA where demand for AI is reflected in their financial results, there is a reason for the rise in stock prices in terms of performance.

Still, in the real market, FOMO and FEMO mix.

They are bought because of their good performance. It becomes a hot topic because people buy it. Because it becomes a hot topic, new funds will come in.

The stronger this cycle is, the more likely investors are to lose their cool.

The important thing in long-term investing is not only to look at the rise in stock prices, but also to check the underlying sales, profits, profit margins, prospects, and stock valuation.

Don't get sucked into FOMO and check the basis of FEMO with numbers. This attitude is very effective when looking at the AI ​​stock boom.

Source/reference materials

• Investor.gov「Say “NO GO to FOMO”」
• Yardeni QuickTakes「US MARKET CALL: FOMO vs FEMO (Fabulous Earnings Momentum)」
• NVIDIA Newsroom「NVIDIA Announces Financial Results for First Quarter Fiscal 2027」
• FINRA「Avoiding Pump-and-Dump Scams」