Traders work on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City on October 19, 2026. <\/p>\n
Angela Weiss | Afp | Getty Images<\/p>\n
A version of the S&P 500 without AI<\/a> briefly pulled ahead of the traditional index this year and is now neck-and-neck as investors rotate into other areas of the market.<\/p>\n A proprietary Goldman Sachs index tracking the S&P 500<\/a> without stocks classified as “AI enablers” was up 12.4% through Oct. 22, edging ahead of the standard S&P 500’s 12% gain. The Goldman index is now neck-and-neck with the S&P 500 as tech rallied in Monday trading. <\/p>\n Tech and AI-related companies make up about 45% of the S&P 500<\/a>. That heavy weighting has helped power the index for years, but it’s turned into a liability lately; the S&P 500 tech sector is down about 7% this month while other sectors have held up. <\/p>\n Investors have soured on debt and equity issued by companies like CoreWeave<\/a> and Oracle<\/a>. Shares of Meta Platforms<\/a> sank almost 7% Thursday after it outlined more plans to spend heavily on capex and issue additional shares.<\/p>\n Companies supplying power and equipment for the buildout have been hit hard \u2014 names like GE Vernova<\/a>, Bloom Energy<\/a>, Vistra<\/a> and Quanta Services<\/a> all suffered steep declines<\/a> during the recent selloff.\u00a0<\/p>\n Goldman, which launched the measure earlier this year with S&P, uses the S&P 500 as its starting universe and excludes companies perceived to be enablers of AI before applying S&P 500 Index weighting methodology to the remaining universe of companies.\u00a0<\/p>\n AI trade loses steam<\/p>\n The ex-AI index lagged the S&P 500 for most of the year as investors continued to favor chipmakers, cloud-computing companies <\/a>and other firms benefiting from heavy AI spending. However, that advantage has been narrowing and it disappeared last week. <\/p>\n Meanwhile, investors are rotating into defensive areas. ETFs like State Street Consumer Staples Select Sector SPDR ETF<\/a>, State Street Health Select SPDR ETF<\/a> and State Street Utilities Select Sector SPDR ETF<\/a> are up 7% to 10% this month. Energy is ahead 10% too, though that’s more related to the war in Iran. <\/p>\n Some analysts recommend sticking with non-AI companies for diversification and protection against more pain in tech. The “AI pendulum has swung back in favor of non-AI exposure over the last two weeks,” Oppenheimer technical analyst Ari Wald said in a note on Oct. 24. <\/p>\n Two industries that Oppenheimer favors now are commercial services and insurance. The firm upgraded those industries to overweight last week, recommending Republic Services<\/a>, Cintas<\/a>, Verisk Analytics<\/a>, Broadridge Financial Solutions<\/a>, MetLife<\/a> and Arthur J. Gallagher.<\/a><\/p>\n Berkshire Hathaway<\/a> is also capitalizing on the rotation out of tech. Its Class B shares are up 8% this month, though it’s still lagging behind the S&P 500 this year. <\/p>\n Berkshire owns a wide swath of operating companies, including insurance giant Geico and Burlington Northern Santa Fe railroad. It also has a $364 billion stock portfolio including companies like Apple<\/a>, Coca-Cola<\/a>, Alphabet<\/a> and Bank of America<\/a>. That diversification may help Berkshire continue to outperform if the tech sector drags down the S&P 500. <\/p>\n Trivector Research sees potential in “non-tech compounders<\/a>.” Healthcare giant <\/a>Eli Lilly<\/a> is one idea. The stock is up 22% on the strength of Lilly’s weight-loss drugs. The company has more in the pipeline<\/a>, including a next-generation obesity drug that Lilly plans to file for FDA approval early in 2027. <\/p>\n