Anything not tied to artificial intelligence took off this week
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Stocks outside the artificial intelligence trade are outperforming the broader market this week by one of the widest margins in nearly three years, according to a recent CNBC analysis of FactSet data. This week's leading S & P 500 outperformers unrelated to AI include Fair Isaac , up almost 14%, Equifax , ahead 10.4%, Darden Restaurants , 10.3% higher, and Brown-Forman , 9% to the good. The split was especially sharp on Wednesday, when the S & P ex-AI index gained 0.61%, outperforming the S & P 500 by 1.72 percentage points, and recording the fifth largest daily gap in favor of the ex-AI benchmark this year. For the week through Thursday, the S & P ex-AI index gained 2.4% while the S & P 500 index declined nearly 1%, putting the ex-AI index ahead by 3.29 percentage points, on pace for its second-biggest weekly outperformance since early 2024. Only the week ended June 26 produced a wider gap recently. Stocks outside AI rose 2.3% that week as the S & P 500 fell roughly 2%, resulting in a 4.26 percentage-point spread. Over the long term, the ex-AI benchmark still trails the S & P 500 but this week's performance offers a snapshot of gains that go beyond the companies tied to the AI hype. Investors are reassessing the market which has increasingly been influenced by a concentrated group of AI-related companies. Reflecting investor desire to look beyond the handful of largest stocks powering the market since ChatGPT debuted in late 2022, Goldman Sachs and S & P Dow Jones Indices introduced the S & P ex-AI index, known by the ticker SPXXAI, in February, Axios reported at the time . The index history was back tested to early January 2024. At its launch, AI-related companies accounted for about 45% of the S & P 500. Goldman positioned the index as a way for investors to measure or hedge against the AI trade and exclude companies with significant exposure to AI-related revenue, infrastructure or demand, including businesses tied to chips, data centers, networking and cloud computing. Trivector Research in August found potential in what it called " non-tech compounders, " companies offering rapid growth that don't rely on the AI buildout. Among those stocks were Eli Lilly , Tapestry and AbbVie . "Non-tech compounders can play an important role in portfolios if AI leadership broadens or volatility increases," Adam Parker, Trivector's founder, wrote.