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Skip NavigationMarketsBusinessInvestingTechPolitics & PolicyVideoWatchlistInvesting ClubPROLivestreamMenuInvestors worried that the artificial intelligence trade might lose steam should look to health care and consumer staples stocks, according to Goldman Sachs. “After months of intensifying pressure from interest rates, concerns about the rising cost of capital have caused the equity market to downgrade its growth expectations,” Goldman analysts led by Ben Snider wrote Friday. “A sharp reduction in investor positioning has amplified equity market moves. During the past two weeks our Cyclicals vs. Defensives pair has declined by 6%, and rates and credit markets have reflected similar pressures.” As a result, Goldman screened for a group of defensive companies that have recently lagged but could be poised for a “catch up” trade if investors suddenly dial back earnings growth expectations. The bank’s defense playbook comes as rising energy prices and interest rates cloud the economic outlook, with higher financing costs raising questions about the durability of the AI infrastructure buildout. Goldman estimates AI capital spending currently contributes about half of S & P 500 earnings growth, but expects that to diminish as spending growth slows. Goldman’s base case still calls for continued earnings growth. But it now sees the likelihood of a catch-up trade in consumer-facing stocks, fueled by weaker energy prices and falling interest rates that its macroeconomic forecasters anticipate in 2027, which will support household spending. Investors concerned about a weaker outcome, however, “should focus on stocks in defensive industries with ‘quality’ attributes,” Goldman said. Here are several names from that made the Goldman screen: Tyson Foods stands out with an 11% trailing four-quarter free cash flow yield, the highest among the companies on Goldman’s screen. Shares of the food and beverage company are down nearly 17% over the past six months, according to FactSet data. Tyson also yields 3.72%. CVS Health also made the cut thanks to its 9% free cash flow yield. Its stock has gained 15% for the year, but has fallen 15% in the past three months. CVS offers a 2.88% yield, FactSet data shows.Read More