For investors who owned artificial intelligence stocks over the past three years, their portfolio has probably done well. But one of Wall Street‘s most influential banks is now flagging a risk to the AI-heavy positioning that has dominated portfolios.
Goldman Sachs released a research note identifying three investment themes that are entirely outside the AI trade.
The data behind each one suggests that investors focused on the semiconductor complex have missed performance in other parts of the market, according to Goldman’s research.
The note, led by Chief U.S. Equity Strategist & Managing Director at Goldman, Ben Snider, argues that a meaningful rotation is already underway.
Goldman Sachs identifies experience-economy stocks as a stealth winner
The first theme centers on companies tied to physical consumer experiences, and the spending acceleration is striking.
Consumer spending on experiences grew 6% year over year in the first quarter of 2026, compared with 2% growth in broader services spending, the Goldman Sachs report found.
Goldman screened 36 stocks across movies and entertainment, casinos and gaming, hotels, resorts, cruise lines, and leisure facilities.
The equal-weighted group has returned 17% year to date, outperforming the equal-weight Consumer Discretionary sector by 17 percentage points.
Ben Snider, chief U.S. equity strategist, says real-world experience companies look appealing given enduring appetite and modest pricing.
“The combination of strong secular demand and undemanding valuations makes companies offering physical consumer experiences an attractive investment theme,” said Snider.
“The combination of strong secular demand and undemanding valuations makes companies offering physical consumer experiences an attractive investment theme,” Snider wrote in the report.
Broader research reinforces that shift in consumer behavior. Between 2023 and 2025, the global experiences market grew at 2.6% while nonessential goods expanded at just 0.8%, a McKinsey report published in June found.
The second theme may be the most counterintuitive, because these 15 companies have been executing well and still getting punished.
Goldman screened for Russell 1000 stocks ranking above the index median across earnings growth, free cash flow conversion, and return on capital.
The median compounder has grown earnings per share more than twice as fast as the S&P 500 median over three years.
Yet despite that superior profit growth, the group has underperformed the equal-weight S&P 500 by seven percentage points year to date.
More Goldman Sachs:
The median compounder trades at 22 times forward earnings versus 16 times for the equal-weight index, Goldman’s data confirmed.
That 37% premium ranks in the 13th percentile since 2016, suggesting valuations are historically cheap relative to earnings quality.
The list includes Visa, Mastercard, Booking Holdings, DexCom, Insulet, MSCI, and On Holding, among others, the report showed. Goldman’s thesis is that this gap between earnings delivery and stock performance may narrow as the AI momentum trade cools.
Goldman Sachs flags record volatility in the AI momentum trade
The catalyst behind this entire rotation call is what has happened to the AI momentum trade in recent weeks.
Goldman’s proprietary Momentum factor recorded annualized three-month volatility of 36%, the highest reading in its 45-year history outside of recessions.
The factor moved by more than 2% on four of five trading days in the week ending July 17, the report confirmed.
Record-low stock correlations have masked the turbulence at the index level, however. The three-month implied average stock correlation across the S&P 500 fell to 0.14, a record low, the report showed.
The ten largest S&P 500 companies now account for more than 40% of the index’s total market cap, BlackRock confirmed in its 2026 outlook.
BlackRock’s outlook notes that index-fund exposure now carries a materially higher concentration in the largest technology names than it did a decade ago.
Goldman’s 3rd non-AI theme rides a record wave of dealmaking
Goldman’s final theme targets potential mergers and acquisitions candidates, and the timing aligns with a historic surge in deal activity.
Announced U.S. mergers and acquisitions activity has totaled $1.2 trillion year to date, a 32% increase year over year, the Goldman report confirmed.
The number of announced deals has risen 12%, with 40% concentrated in computers and electronics and in health care.
Goldman equity analysts flagged 71 stocks as potential acquisition targets in the report. That basket has beaten the equal-weight S&P 1500 by eight percentage points since the first quarter ended.
Yet valuations for most candidates show limited sign of an elevated premium, the report noted.
What Goldman’s non-AI call signals for the broader market in 2026
Goldman has not abandoned its bullish stance on AI, and the bank’s year-end S&P 500 target of 8,000 still reflects substantial AI-driven earnings growth. The firm projects earnings per share growth of 24% for the full index in 2026.
But the message to investors is that the next leg of returns may not come from the same place as the last one.
Gargi Pal Chaudhuri, BlackRock’s chief investment and portfolio strategist for the Americas, made a similar case in the firm’s 2026 outlook.
She noted that AI’s dominance introduces concentration and correlation risks, which argues for targeted diversification across sectors.
The Goldman research highlights an emerging dynamic: proven growth companies are trading below their historical averages at the same time that Wall Street‘s most crowded trade faces growing turbulence.
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