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Citi Research analysts have presented a list of AI-related stocks to cover as an alternative to short positions for investors with a bearish view on the AI theme.
While Citi analysts do not believe AI is on the cusp of a breakthrough,… a bubble, some investors may feel safer covering some AI stocks.
The following list names 50 of the 100 stocks that are most negatively correlated with the relative returns of stocks with high exposure to AI.
“While AI is a bubble in the making, an outright negative position could be too costly in the near term, at least from a risk perspective,” analyst Drew Pettit wrote in a Citi Research thematic equity strategy report.
In addition, this listing has value and low volatility factor characteristics, he added, making it a “potentially more acceptable protective trade as investors can leverage the trade to meet their own risk needs.”
Finally, the lower volatility of the list limits the benefits to investors if AI significantly underperforms, but eliminates some of the risk of underperformance if a bubble ends up forming, analysts said.
These are the AI hedge stocks, part 2:
(Part 1 here)
High exposure to AI is relative to the MSCI ACWI (ACWI).
- Merck & Co. Inc. (MRK): High relative exposure to AI: -0.43
- FirstEnergy Corp. (FE): High relative exposure to IA: -0.43
- National Grid Plc (NGG): High AI Relative Exposure: -0.43
- AXA SA (OTCQX:AXAHF): relative exposure vs high to IA: -0.43
- ING Groep NV (ING) – Relative exposure to high IA: -0.42
- Berkshire Hathaway Inc. Class B (BRK.B): relative exposure to high IA: -0.42
- Novartis AG (NVS): relative exposure vs. high AI: -0.42
- Airbus SE (OTCPK:EADSF): High relative exposure to AI: -0.42
- Munich Reinsurance Company [Not covered] – Relative vs. high exposure to AI: -0.42
- Centene Corp. (CNC): High relative exposure to AI: -0.42
- BP Plc (BP) – Relative exposure to high IA: -0.42
- Johnson & Johnson (JNJ) – AI Exposure: -0.42
- General Mills Inc. (GIS): High relative exposure to AI: -0.42
- United Therapeutics Corp. (UTHR): High relative exposure to AI: -0.42
- Veolia Environnement SA (OTCPK:VEOEY): relative exposure to high IA: -0.42
- JPMorgan Chase & Co. (JPM) – Relative exposure vs. high to AI: -0.42
- VICI Properties Inc. (VICI) – Relative Exposure vs. High IA: -0.42
- Danone SA (OTCQX:DANOY): High relative exposure to AI: -0.42
- Alliant Energy Corp. (LNT): High relative exposure to IA: -0.42
- Chevron Corp. (CVX): High relative exposure to IA: -0.41
- Manulife Financial Corp. (MFC): High relative exposure to IA: -0.41
- Anheuser-Busch InBev SA/NV (BUD): relative exposure vs. high to IA: -0.41
- Bank of New York Mellon Corp. (BK): High relative exposure to IA: -0.41
- NiSource Inc. (NI): High relative exposure to AI: -0.41
- Edison International (EIX): Relative vs. High Exposure to AI: -0.41
- Intesa Sanpaolo SpA (OTCPK:ISNPY): relative exposure vs high to IA: -0.41
- Philip Morris International Inc. (PM): High relative exposure to AI: -0.41
- Imperial Oil Limited (IMO) – Relative Exposure vs High to IA: -0.41
- Gaming and Leisure Properties Inc. (GLPI): Relative vs. High Exposure to IA: -0.41
- Entergy Corp. (ETR): Relative vs. High Exposure to IA: -0.40
- Altria Group Inc. (MO): High relative exposure to AI: -0.40
- Hess Corp. (HES): High relative exposure to AI: -0.40
- Fifth Third Bancorp (FITB): Relative Exposure to High AI: -0.40
- PepsiCo Inc. (PEP): High relative exposure to AI: -0.40
- Huntington Bancshares Inc. (HBAN): High relative exposure to AI: -0.40
- The Williams Companies Inc. (WMB): High relative exposure to AI: -0.40
- Ulta Beauty Inc. (ULTA): Relative vs. High Exposure to AI: -0.40
- Essential Utilities Inc. (WTRG): High relative exposure to IA: -0.39
- ConocoPhillips (COP) – Relative Exposure vs. High AI: -0.39
- United Overseas Bank Limited (OTCPK:UOVEF): High relative exposure to IA: -0.39
- Bristol-Mayers Squibb Co. (BMY): Relative vs. High Exposure to AI: -0.39
- Equinor ASA (EQNR) – Relative exposure vs. high AI: -0.39
- Suncor Energy Inc. (SU) – Relative Exposure vs High to IA: -0.39
- Targa Resources Corp. (TRGP): High relative exposure to AI: -0.39
- AbbVie Inc. (ABBV): High relative exposure to AI: -0.39
- Ameren Corp. (AEE): High relative exposure to IA: -0.39
- Conagra Brands Inc. (CAG): High relative exposure to IA: -0.39
- Telefónica SA (TEF) – Relative exposure to high IA: -0.39
- Cincinnati Financial Corp. (CINF): High relative exposure to IA: -0.38
- Sun Life Financial Inc. (SLF): High relative exposure to IA: -0.38