Goldman Sachs Ex-AI Index Beats S&P 500 as Investors Diversify
An index tracking S&P 500 stocks excluding AI companies gained 12.4% by October 22, beating the broader index’s 12% rise, according to Ticker News. The October 27 report highlighted growing investor interest in defensive stocks following losses in technology shares.
The 0.4 percentage-point advantage marks a turnaround for the Goldman Sachs index, which had previously lagged the broader market. Its methodology excludes companies considered major beneficiaries or enablers of artificial intelligence.
Technology Losses Drive Interest in Other Sectors
Technology and AI-related companies account for approximately 45% of the S&P 500, leaving the benchmark heavily exposed to their performance. The technology sector fell about 7% during October, while other sectors remained relatively stable.
The Nasdaq dropped 4.5% in the preceding week amid concerns about rising interest rates and their implications for AI investment. Technology shares subsequently rebounded on October 19 as traders responded to the earlier decline.
AI-related stocks have faced renewed selling pressure, including CoreWeave and Oracle. Meta Platforms fell nearly 7% after announcing plans for additional capital spending and share issuance.
Power-equipment providers GE Vernova and Vistra also suffered losses during the downturn.
Defensive Funds Gain as Technology Shares Fall
Exchange-traded funds focused on consumer staples, healthcare and utilities gained between 7% and 10% during October, according to Ticker News. Their gains contrasted with the weakness affecting technology shares.
Oppenheimer analysts have recommended greater exposure to commercial services and insurance as investors seek alternatives to AI-focused stocks. The firm upgraded Republic Services and MetLife to overweight.
Berkshire Hathaway’s Class B shares climbed 8% during the month. Its diversified holdings, including insurance business Geico and its investment in Apple, have attracted attention during the shift away from AI-heavy investments.
Healthcare and Travel Stocks Attract Analyst Interest
Trivector Research highlighted Eli Lilly as a non-tech growth opportunity, pointing to its performance supported by demand for weight-loss drugs.
Barclays also upgraded Viking Holdings, citing a strong booking outlook for 2027. The cruise operator represents another investment opportunity outside the technology sector.
The contrasting performance of AI-related shares and defensive investments has brought portfolio concentration into focus. The Goldman Sachs index’s recent gains show how excluding AI-linked companies has affected returns during October’s technology-sector weakness.