Goldman Sachs Urges 3 Non-AI Trades as Momentum Factor Erases Gains Since April
Updated
Updated · Business Insider · Jul 20
Goldman Sachs Urges 3 Non-AI Trades as Momentum Factor Erases Gains Since April
3 articles · Updated · Business Insider · Jul 20
Summary
Goldman Sachs told investors to rotate into three non-AI themes—consumer experience stocks, compounders and M&A candidates—as volatility shakes the AI-led rally.
The bank said the shift follows a sharp breakdown in momentum: stocks with the strongest 2026 gains are now seeing the steepest pullbacks, while the Momentum factor has wiped out gains since end-April.
Ben Snider said that factor’s volatility has climbed to its highest level on record outside recessions, with memory and broader chip stocks hit by capex worries and new competition from China.
Goldman argues the backdrop favors stock-picking: the equal-weight S&P 500 is still making new highs, stock correlations have fallen to multi-decade lows, and potential M&A targets have beaten the equal-weight S&P 1500 by 8 percentage points since Q1.