Goldman Sachs Names 3 Investment Themes as AI Stock Rally Loses Momentum

According to Goldman Sachs analyst Ben Snider in a recent report, as AI-related stocks lose momentum, investors should consider three investment themes with minimal correlation to AI concepts. Snider identified consumer experience stocks, compounding growth stocks, and merger-acquisition candidates as alternatives offering lower valuations and reduced exposure to AI volatility.

Consumer experience stocks provide exposure to structural growth in experiential consumer spending with limited AI disruption risk, the bank noted. Compounding growth stocks feature strong earnings growth and free cash flow conversion but currently trade at historically discounted valuations. Merger-acquisition candidates, identified by Goldman Sachs equity analysts, remain undervalued despite increased acquisition activity, with these stocks outperforming equal-weighted S&P 1500 by 8 percentage points since end of Q1.