Want to hop off the AI trade? Goldman says buy these stocks that have nothing to do with it

Eli Lilly Price Target

$1,344

Morgan Stanley's price target for Eli Lilly implies a 26.2% upside from recent closing prices.

Fortinet Stock Increase

68.7%

Fortinet's stock has increased by 68.7% this year, with a significant contribution from a strong Q1 performance.

Chewy Stock Decline

37%

Chewy's stock has declined by 37% this year, despite being recognized as a top internet pick.

§ 01 Executive Snapshot

What: Goldman Sachs identifies stocks to buy that are not influenced by the AI trade.
Who: Goldman Sachs, Eli Lilly, Fortinet, Chewy, Morgan Stanley, BTIG, Wolfe Research.
Why it matters: Highlights investment opportunities amid the dominance of AI stocks in the market, emphasizing the need for diversification.

Goldman Sachs analysts report that the AI trade is dominating the S&P 500 and Nasdaq indexes, driving them to record highs this year.
Eli Lilly's stock has only 9% of its recent returns attributed to the economic outlook and AI, with a price target of $1,344 set by Morgan Stanley.
Fortinet's stock is up 68.7% this year, with 19% of its returns linked to the U.S. economic outlook and AI, following a strong Q1 performance.
Chewy has seen a 37% decline in stock price this year, with only 11% of its recent returns driven by AI and the economic outlook, yet it is considered a top internet pick by Wolfe Research.

The current investment landscape is heavily influenced by AI momentum, which has led to many stocks being viewed as part of a singular trade rather than a diverse market.
Analysts are urging investors to seek equities with strong fundamental support, regardless of their association with AI, to mitigate risks.

Immediate market consequences include potential shifts in investor focus toward more diversified portfolios that are less sensitive to AI trends.
Long-term implications may involve a reevaluation of stock valuations and investment strategies that prioritize earnings growth over market fads.

Potential regulatory scrutiny around AI-driven stocks may create uncertainties for investors heavily invested in this sector.
Market volatility tied to the performance of AI stocks could lead to broader economic impacts, affecting companies with less exposure to AI.

Watch for upcoming earnings reports from Eli Lilly, Fortinet, and Chewy to assess whether their performance aligns with analysts' expectations.
Future movements in the S&P 500 and Nasdaq indexes will indicate if the AI trade continues to dominate or if a shift towards diversified investments occurs.

§ 07

What stocks does Goldman Sachs recommend buying?

Goldman Sachs recommends buying stocks like Eli Lilly, Fortinet, and Chewy that are not influenced by the AI trade.

Why is it important to diversify investments away from AI stocks?

Diversifying investments is important to mitigate risks associated with the dominance of AI stocks in the market.

How much of Eli Lilly's recent returns are attributed to AI?

Only 9% of Eli Lilly's recent returns are attributed to the economic outlook and AI.

When should investors watch for earnings reports from the recommended stocks?

Investors should watch for upcoming earnings reports from Eli Lilly, Fortinet, and Chewy to assess their performance.