AbbVie emblem on trendy glass workplace constructing with metallic columns, South San Francisco, California, Oct. 16, 2025.
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Jefferies recommends proudly owning high quality, low-stress shares to experience out the summer time as markets turn out to be extra risky amid elevated considerations tied to funding in synthetic intelligence.
AI-related questions vary from potential overcapacity, the earnings that can outcome from hyperscalers investing an estimated $700 billion in capital spending and rising prices for tokens, the charges paid to AI fashions, in line with a word from Desh Peramunetilleke, head of quantitative technique at Jefferies.
As proof of the recognition of all issues AI, the S&P 500 momentum index has outperformed the broader inventory market by greater than 70% since 2024, near ranges seen throughout the dot-com run of the Nineties. Earlier than the outbreak of struggle with Iran, momentum methods had included supplies and protection shares, however at the moment AI alone is carrying the ball, “growing the chance of an unwind on adversarial sentiment,” the strategist wrote Monday.
“Whereas we nonetheless see the theme as a long-term winner, the above causes might drive an unwinding of the AI-led momentum,” Peramunetilleke mentioned.
Peramunetilleke and his crew really helpful a listing of what they name high-quality firms with low momentum to experience out any potential AI-led storms.
Jefferies seemed for firms with a top quality rating, market values of greater than $10 billion, stable fundamentals and long-term free money movement yields above 3%. The group additionally needed to embody shares with restricted momentum and enticing valuations promoting for lower than 20 instances anticipated earnings over the subsequent yr.
Listed here are 10 shares from Jefferies’ record:
Drugmaker AbbVie scored a high quality rating from Jefferies, which sees the corporate delivering compound annual earnings progress of almost 28% in 2026-2027, with a free money movement yield of 5.2%, one of many stronger progress and money movement combos on the record.
AbbVie in its first-quarter monetary reported $15 billion in worldwide internet revenues, pushed largely by a $7.3 billion immunology portfolio. Final week, AbbVie strengthened its next-gen immunology pipeline after agreeing to purchase Apogee Therapeutics for $10.9 billion, its largest acquisition in additional than 5 years.
Chicago-based AbbVie is about to launch second-quarter outcomes on July 31. The inventory has climbed 25% previously three months, 37% previously yr and yield 2.7%, based mostly on FactSet knowledge.
Netflix, with a $320 billion market worth and a 3.6% free money movement yield, additionally shared a top quality rating in Jefferies’ mannequin. The dominant streaming platform forecast second-quarter income progress of 13% regardless of warning that content material spending could be weighted within the first half of the yr because of the timing of title launches.
The streaming big’s shares fell 10% in mid-April when second-quarter steering fell in need of Wall Avenue expectations and it left full-year forecasts unchanged.
Netflix is about to launch second-quarter outcomes on July 16. The inventory is down 18% in 2026 to date and virtually 41% decrease over the previous 12 months.
Different firms on Jefferies’ high quality, low-stress display embody Lowe’s Firms, McDonald’s and American Specific.