Traders Chase ‘AI Resistant’ Stocks as Disruption Fear Hits Tech
(Bloomberg) — A new group of stock winners has emerged as technology shares slide: Companies with businesses that artificial intelligence can’t replicate.
The S&P 500 Index has dropped 2% this week, pulled down by software companies as investors’ concern that AI will disrupt those business models intensified following the rollout of new tools by startup Anthropic. At the same time, homebuilders, transportation companies and makers of heavy machinery posted strong gains. Consumer staples firms, already considered havens in a downturn, are up 4.7% and heading for their best week since 2022.
It’s a reversal of the thesis that’s driven the three-year bull market in US equities. Technology was long the market’s juggernaut on the expectation that AI would transform the economy. Now, investors fret many tech players will be left behind in that very transformation — and the world of physical goods looks more attractive by comparison.
“Investors are rotating toward groups that are ‘AI resistant.’ These are groups that have physical, real-world components,” Michael O’Rourke, chief market strategist at JonesTrading, wrote in a note this week. “They are not a bad place to hide, and boring may never have been so attractive.”
Homebuilders and makers of building products, for example, are seen fitting that bill. Citi analyst Anthony Pettinari noted that their core activities — manufacturing, distribution and assembly — aren’t the kind of thing AI can replace. An index of homebuilding and residential construction-related stocks has rallied 12% in 2026, a sharp contrast to a small decline in the benchmark S&P 500, despite what the analyst called “mediocre” earnings.
“At the end of the day, you still need humans out there building the homes,” said Citizens analyst Jay McCanless, who covers homebuilders, adding that the timing is favorable for the group as it coincides with spring homebuying season. “If a rotation out of tech stocks is helping push the prices higher for my builders, so much the better.”
Then there are machinery makers and transports, both heading for their best weeks since May. Investors had been rotating into companies such as Deere & Co. and FedEx Corp. for weeks, encouraged by falling interest rates and a resilient US economy.
Strong manufacturing data delivered another dose of optimism on Monday — just before investors started yanking money out of the tech sector and looking for other places to put it. That combination spurred the rally in these industrials to accelerate, Baird investment strategist Ross Mayfield said.
Back to Basics
Consumer staples and chemicals are also among AI-resistant firms, JonesTrading’s O’Rourke noted. The staples group, composed of companies such as Dollar General Corp. and Dollar Tree Inc., has fared the best among the S&P 500 sectors this week.
Chemical stocks that suffered large declines in 2025 amid lower demand and tariff impacts, are now seeing a comeback on hopes that business will improve and that manufacturing and homebuilding, key markets for chemicals, will expand in 2026. That’s lifted Dow Inc., which produces chemicals for industrial, packaging and materials applications, and LyondellBasell Industries NV, which produces polymers, chemicals and fuel products.
“Investors are looking at commodity chemicals for potential rebound this year in profitability and improving outlook as demand recovers, and then looking at specialty chemicals as a more defensive play right now to the extent we are seeing a rotation out of higher growth sectors like tech,” Morningstar analyst Seth Goldstein said.
It all added up to a split screen across the market this week. Baskets of truckers, machinery stocks and consumer staples all notched record highs, while the tech-heavy Nasdaq 100 extended losses to 6% from its late-October all-time high.
“If people are taking profits in software or selling software on the AI outlook, they have a lot of really good equity options to move into,” Baird’s Mayfield said.
–With assistance from Janet Freund.
©2026 Bloomberg L.P.
