Goldman Sachs recommends defensive stocks as AI trade concerns grow

Goldman Sachs has identified 23 defensive stocks in healthcare and consumer staples with low volatility and high free cash flow yields, steering investors away from the AI trade. The recommendation comes as analysts cite rising interest rates pressuring AI earnings expectations, with S&P 500 earnings growth projected to slow from 29% in 2026 to 18% in 2027. The list includes companies such as Merck, CVS Health, and Tyson Foods, which offers the highest free cash flow yield at 11% over the trailing four quarters.