Stocks outside the artificial intelligence trade are outperforming the broader market this week by one of the widest margins in nearly three years. An analysis of FactSet data shows the S&P ex-AI index outperformed the S&P 500 by 3.29 percentage points for the week through Thursday. The S&P ex-AI index gained 2.4% during that period. The S&P 500 declined nearly 1%. The S&P ex-AI index was on pace for its second-biggest weekly outperformance since early 2024.
The split was especially sharp on Wednesday, when the S&P ex-AI index gained 0.61%. The S&P ex-AI index outperformed the S&P 500 by 1.72 percentage points that day. Wednesday recorded the fifth-largest daily gap in favor of the S&P ex-AI index this year. Only the week ended June 26 produced a wider weekly gap recently. Stocks outside AI rose 2.3% that week. The S&P 500 fell roughly 2% that week, resulting in a 4.26 percentage-point spread.
This week's leading S&P 500 outperformers unrelated to AI include Fair Isaac, which rose almost 14%. Equifax gained 10.4%. Darden Restaurants rose 10.3%. Brown-Forman gained 9%.
The week's performance demonstrates gains beyond companies tied to AI. However, the S&P ex-AI index still trails the S&P 500 over the long term. Investors are reassessing a market increasingly influenced by a concentrated group of AI-related companies.
Axios reported that Goldman Sachs and S&P Dow Jones Indices introduced the S&P ex-AI index, with the ticker SPXXAI, in February. The launch reflected investor demand to look beyond the largest stocks driving the market since ChatGPT debuted in late 2022. The index history was backtested to early January 2024. AI-related companies accounted for about 45% of the S&P 500 at the launch. Goldman positioned the index as a way for investors to measure or hedge against the AI trade. The index excludes 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 identified potential in fast-growing companies that do not rely on the AI buildout, calling those companies "non-tech compounders". Trivector's examples included Eli Lilly, Tapestry and AbbVie. Trivector founder Adam Parker wrote that non-tech compounders can play an important portfolio role if AI leadership broadens or volatility increases.
Non-AI Stocks Outperform S&P 500 by 3.29 Percentage Points This Week
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Summary
Non-AI stocks surged 2.4% this week, outperforming the S&P 500 by 3.29 percentage points, as the index fell nearly 1%, per FactSet. The S&P ex-AI index, launched in February by Goldman Sachs and S&P Dow Jones Indices, hit its second-largest weekly gain since early 2024. Top gainers included Fair Isaac, Equifax, Darden Restaurants, and Brown-Forman. The move came amid shifting sentiment, with the fear and greed index showing signs of stabilization. Investors are also watching upcoming inflation data for further clues on market direction.
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