Wall Street Veterans Shift from AI Hype to Boring, Profitable Companies
While robots and artificial intelligence capture the public imagination, seasoned investors are looking somewhere far less futuristic for their next gains. As excitement builds around AI breakthroughs and automation, one Wall Street veteran is reminding the market that sometimes the safest bet is the business that already works reliably.
The Rotation to Tangible Assets and Essential Services
Josh Brown, chief executive of Ritholtz Wealth Management, explains that after several years of AI stocks dominating financial headlines, US investors are now rotating into commodity producers, fast-food chains, and industrial manufacturers. These are companies with tangible products and durable demand that cannot be easily disrupted by technological trends.
Among the recent winners in this shift are:
- McDonald's, whose shares have climbed roughly 12 percent over the past year
- Tractor maker John Deere, up about 18 percent
- Exxon Mobil, which has gained approximately 15 percent
- Coca-Cola, up 10 percent
- Procter & Gamble, up 9 percent
- Defense giant Lockheed Martin, which has advanced about 14 percent
For retirement savers with money in stocks, experts say these established companies could offer much-needed stability in volatile market conditions.
Why Boring Businesses Are Winning
Explaining the appeal of these traditional companies, Brown told the Wall Street Journal: 'These are the companies that you cannot type something in a prompt and disrupt.' His argument is straightforward and compelling. While AI can streamline services and generate content efficiently, it cannot replace a burger, pump oil from the ground, or manufacture heavy equipment.
These businesses produce physical goods and provide essential services that remain in demand regardless of technological hype or market sentiment. Brown notes that the shift away from pure technology plays toward results-driven, cash-generating companies is even visible within specific industries.
Take the travel sector as an example. In February, shares of Delta Air Lines rose 5.4 percent, while online travel platform Expedia Group saw its stock slide 23 percent over the same period. AI may be able to find the cheapest hotel room or flight in seconds, but it cannot replace the aircraft, crews, and infrastructure required to physically move passengers across the country.
Investors Seeking Safety in Turbulent Markets
Confirming this broader trend, Jed Ellerbroek, portfolio manager at Argent Capital Management, said investors have been actively seeking safer bets amid increasingly turbulent market conditions. 'What I see is investors hiding out,' he observed. 'I do think we're in a new chapter, and I think that chapter is going to be defined by companies proving it. Hype isn't cutting it anymore.'
The rotation comes as US stocks struggle relative to international markets. The S&P 500, which tracks America's largest companies, is down about 1 percent so far in 2026. By contrast, the MSCI ACWX index - which measures stock returns outside the United States - is up roughly 8 percent.
It is unusual for US stocks to lag the rest of the world, though this pattern also occurred during the years following the dot-com crash in the early 2000s and briefly in 2022. According to data from Goldman Sachs, the current performance gap is the widest since 1995, when Europe and Japan were rebounding from deep recessions and the US dollar, as today, was relatively weak.
Multiple Forces Weighing on American Equities
The divergence between US and international markets began last year. Over the past 12 months, international markets have climbed around 30 percent, compared with gains of only about 10 percent for US stocks. Several significant forces are weighing on American equities and driving this investor rotation.
Investors have grown increasingly uneasy about geopolitical risks, including renewed tariff threats and foreign policy tensions. Tariffs introduced - and repeatedly expanded - by Donald Trump have sent US stocks on a rollercoaster ride over the past year, while controversial comments about claiming Greenland as US territory added to global uncertainty.
At the same time, the US dollar has fallen sharply, denting returns for international investors when converting profits back into their home currencies. For years, US stocks were seen as the superior bet, with American companies delivering stronger growth and higher returns than overseas peers. That advantage has noticeably faded in recent months.
'For global investors, the re-pricing of [the US dollar] and erosion of the spread between U.S. companies and others was brutal in 2025,' Viktor Shvets, head of global desk strategy at Macquarie Group, wrote in a note to clients.
Valuation Concerns Driving the Shift
Valuations present another significant concern for investors. One common measure compares share prices to company profits - the price-to-earnings ratio - showing how much investors are willing to pay for every dollar earned. After the 2008 financial crisis, US valuations were broadly in line with global markets.
But over the past decade, the explosive growth of Big Tech pushed American price-to-earnings ratios dramatically higher. Today, US valuations sit roughly 40 percent above those of global peers, creating what many see as an unsustainable premium.
For investors rotating out of hype-driven sectors like artificial intelligence, the message from Wall Street's veterans is becoming increasingly clear: in uncertain times, boring can be a better bet - and sometimes, resilience itself represents the real innovation that delivers consistent returns.
