Goldman points AI-wary investors toward three stock-market detours
With chip stocks in a bear market, Goldman Sachs says investors are hunting for growth ideas beyond artificial intelligence.
By Sal Moretti · Money Reporter
3 min read
The AI trade has hit a rough patch, and Goldman Sachs is pointing nervous investors toward three places to look instead.
The PHLX Semiconductor Index, home to chip names tied closely to artificial intelligence such as Nvidia and Micron Technology, has fallen 20% from an intraday high reached about a month ago, putting the benchmark in a bear market.
Goldman Sachs analysts led by Ben Snider said in a note published late Friday that sharp swings in popular AI infrastructure stocks have pushed investors to seek themes away from artificial intelligence. The bank highlighted three baskets: consumer experience stocks, so-called compounders and potential takeover targets.
Experiences over algorithms
Goldman’s first idea is consumer experience stocks, a category the firm says can tap growth in spending on activities while facing less risk from AI disruption than some other service businesses.
The bank cited spending on areas including sports centers, parks, theater, museums and gambling. According to Goldman, growth in experience spending picked up from 1% in the first quarter of 2025 to 6% in the first quarter of 2026. Broader services spending grew 2% in both periods.
Goldman said many of those experiences are more heavily used by higher-income consumers. The analysts also said the physical nature of the activities may help shield them from AI-driven disruption relative to other services.
The firm screened for companies with market values above $2 billion and identified 36 names. Goldman said the main danger for that strategy is a weaker consumer, including pressure from higher oil prices or a softer labor market.
The steady growers
The second basket focuses on what Goldman calls compounders: companies with a record of consistent earnings growth, high returns on capital and strong free-cash-flow conversion.
To build the group, Goldman screened the Russell 1000 for stocks that ranked above the index median on growth and quality measures. Those measures included historical earnings-per-share growth, expected future earnings growth, return on invested capital and free-cash-flow conversion.
The bank said it removed the stocks most clearly tied to AI, including companies benefiting from infrastructure spending and businesses viewed as exposed to AI disruption.
Goldman’s compounder basket contains 15 stocks. The median stock in the group trades at 22 times earnings, compared with 16 times for the equal-weight S&P 500, according to the firm. Goldman said that relative valuation is near 10-year lows.
The analysts said the economic backdrop and earnings outlook should give more support to those valuations. They also flagged two risks: a more dovish Federal Reserve pivot or a broad improvement in economic growth, either of which could make other parts of the market more attractive.
Takeover bait
Goldman’s third theme is merger-and-acquisition targets. The bank said announced deal volume has reached $1.2 trillion this year, up 32% from 2025. The number of announced deals has climbed 12%.
Goldman said 40% of deals have been in computers and electronics and in health care, though activity has appeared across a range of industries.
The firm said easy financial conditions, steady economic growth, healthy chief-executive confidence and a friendlier regulatory backdrop could keep dealmaking going. Goldman said the key risk is a drop in sentiment that threatens the M&A cycle.
Its M&A basket includes 71 companies that Goldman analysts estimate have a greater than 15% chance of being acquired.
The call comes as U.S. stock-index futures were higher, Treasury yields rose, the dollar index edged lower, oil futures gave back early gains and gold traded around $4,020 an ounce, according to MarketWatch data.
This story draws on original reporting from MarketWatch.