Want to hop off the AI trade? Goldman says buy these stocks that have nothing to do with it

Goldman Sachs highlighted a set of Russell 1000 stocks with low sensitivity to AI and economic-growth trades, emphasizing names with recent positive earnings revisions. Eli Lilly is down about 1% this year, Fortinet is up 68.7%, and Chewy is down 37%, but each has supportive analyst calls and price targets: Lilly at $1,344 (+26.2%), Fortinet at $125 vs. $133.93 close, and Chewy at $39 versus $20.73 close. The piece is mainly a stock-picking note rather than a broad market catalyst.

Analysis

The market is increasingly rewarding names whose earnings trajectory is being re-rated by idiosyncratic fundamentals rather than macro beta, and that has an important implication: dispersion should stay high even if headline indices remain bid. In this regime, the most dangerous crowded exposure is not “AI” in isolation, but factor clustering around momentum and growth expectations; when that crowding unwinds, low-beta, earnings-upgrade names with little economic sensitivity can outperform sharply because they are under-owned relative to their fundamental durability.

LLY stands out as a multi-year compounding story with a near-term catalysts stack that the market still appears to underwrite conservatively. The second-order effect is broader than pharma: sustained GLP-1 penetration is pressure on obesity-related discretionary spend, but also on adjacent categories like premium foods, wearable health devices, and some retail basket mix. The main risk is not demand collapse; it is supply normalization and payer pushback over a 6-18 month horizon, which could compress the valuation multiple even if absolute earnings continue rising.

FTNT is a cleaner expression of enterprise security spend that is less dependent on capex AI optimism and more on security budget normalization after a period of delayed buying. If the company can sustain mid-teens top-line growth, the real upside comes from operating leverage and not just revenue beats, which means margins can re-rate faster than consensus models imply. The market may be underestimating how quickly security vendors with strong execution can regain pricing power when buyers re-open budgets.

CHWY is the most contrarian setup: it is being priced as a show-me story while any stabilization in customer cohort retention or gross margin can trigger multiple expansion from deeply compressed levels. The key second-order dynamic is that defensiveness in household pet spend can make this a relative winner if consumer macro data softens, because the stock currently embeds a harsher demand scenario than the category usually experiences. The risk is that reacceleration takes longer than expected, so this is more of a 3-6 month catalyst trade than a clean long-duration compounder.

Key Decisions for Investors

• Long LLY on pullbacks over the next 1-3 weeks; target a 6-12 month hold. Risk/reward remains favorable because the market is still pricing in conservative forward assumptions, while upside can come from both earnings revisions and multiple support.
• Add FTNT on confirmation of post-earnings follow-through; trade it as a 1-2 quarter momentum-with-fundamentals name. Risk is limited if growth holds, but upside accelerates if margin expansion becomes the dominant narrative.
• Initiate a CHWY starter long with a 3-6 month horizon, sized smaller than LLY/FTNT. Use it as a contrarian mean-reversion trade where downside is already partially discounted, but only if retention or margin indicators stabilize.
• Consider a pair trade: long LLY / short a basket of AI-bellwethers with stretched positioning over the next 1-2 quarters. The goal is to capture dispersion if the market broadens beyond the single-factor AI trade.
• Sell downside puts or use call spreads in FTNT rather than outright equity if entering after the recent run. This preserves participation while reducing multiple-contraction risk if the market rotates away from high-duration software/security.