S&P 500 Ex-AI Index Edges Ahead — What the 12.4% Gain Signals

S&P 500 Leadership Is No Longer an AI-Only Story

The S&P 500’s narrow AI leadership is being tested as a Goldman Sachs index excluding perceived AI enablers briefly moved ahead through Oct. 22. For investors, the message is not that the technology trade has ended. It is that Berkshire Hathaway, defensive sectors, healthcare and selected consumer businesses can now compete for performance without requiring continued strength from AI-related shares.

According to CNBC, the proprietary Goldman Sachs ex-AI index gained 12.4% through Oct. 22, compared with a 12% advance for the standard S&P 500. That slim advantage later narrowed as technology rallied in Monday trading, leaving the precise current performance difference unknown. The important shift is breadth: a portfolio stripped of perceived AI enablers was briefly able to match and exceed the market benchmark.

How the Goldman Sachs Ex-AI Index Works

The Goldman Sachs measure starts with the S&P 500, removes companies classified as “AI enablers,” and then applies S&P 500 Index weighting methodology to the remaining universe. Goldman Sachs launched it with S&P earlier this year. In practical terms, the index is a controlled comparison between the broad benchmark and a version designed to exclude companies viewed as enabling artificial intelligence.

The complete methodology and constituent list have not been disclosed in the supplied evidence. That matters because an “ex-AI” label alone does not reveal the resulting sector concentrations or company-level exposures. The index’s 12.4% gain therefore establishes relative performance through Oct. 22, not a complete map of what produced it.

Concentration raises the stakes. Tech and AI-related companies account for about 45% of the S&P 500, so weakness in that group can exert significant pressure on the capitalization-weighted benchmark. The S&P 500 technology sector was down about 7% this month, creating room for areas with different earnings drivers to carry more of the index return.

The Rotation From AI Exposure to Defensive Sectors

The clearest evidence of rotation sits in defensive funds. The State Street Consumer Staples Select Sector SPDR ETF, State Street Health Select SPDR ETF and State Street Utilities Select Sector SPDR ETF gained 7% to 10% this month. Energy advanced 10% this month as well, although the supplied facts connect that move more closely to the war in Iran than to the reassessment of AI exposure.

These moves show how sector leadership can change even when the headline S&P 500 return remains positive. If a large technology weight falls as defensive groups rise, the benchmark can conceal sharp differences underneath. An ex-AI portfolio benefits mechanically from avoiding excluded decliners, while its remaining holdings gain greater influence under the applied weighting methodology.

Oppenheimer upgraded commercial services and insurance to overweight. In an Oct. 24 note, Ari Wald wrote that the “AI pendulum has swung back in favor of non-AI exposure over the last two weeks.” That assessment describes a tactical change in relative exposure, not evidence that non-AI shares will continue outperforming.

Company Read-Through: Meta Platforms, Berkshire Hathaway and Eli Lilly

• Meta Platforms: Shares fell almost 7% Thursday. The decline makes Meta Platforms a direct indicator of how investors are treating a large company associated with heavy capital spending and additional share issuance plans. The next checkpoint is whether its stock stabilizes alongside technology or continues to trail the non-AI and defensive groups.
• Berkshire Hathaway: Class B shares gained 8% this month. Berkshire Hathaway combines operating businesses including Geico and Burlington Northern Santa Fe railroad with a $364 billion stock portfolio containing Apple, Coca-Cola, Alphabet and Bank of America. That mix gives investors exposure across insurance, transportation and publicly traded holdings, though Apple and Alphabet mean it is not a pure technology hedge.
• Eli Lilly: The stock gained 22%, supported by its weight-loss drugs. Its next company-specific checkpoint is the planned filing for FDA approval of a next-generation obesity drug early in 2027. A filing is only a regulatory step; the supplied evidence does not establish that the drug will receive approval.

The three cases represent distinct risks. Meta Platforms is exposed to the market’s treatment of technology spending, Berkshire Hathaway offers diversified operating and portfolio exposure, and Eli Lilly depends partly on a pharmaceutical pipeline with regulatory uncertainty. Grouping them all as “non-AI” would obscure the separate mechanisms behind their performance.

Viking Holdings Turns Bookings Into a Demand Check

Viking Holdings supplies a consumer-demand test grounded in bookings rather than the AI investment cycle. The company said 40% of its river capacity and 60% of its ocean capacity was already booked for 2027. It also said guests had remained resilient and continued booking 2027 and future seasons.

The stock gained 15% this year. Its average Wall Street target was $109 against recent prices around $82, and Barclays upgraded Viking Holdings to overweight with a $102 target, describing the setup as “compelling risk/reward.” Targets are analyst expectations rather than achieved prices, and the exact current share price is not supplied.

Capacity booked for 2027 provides visibility into demand, though bookings alone do not establish the eventual financial outcome. Investors can use subsequent booking disclosures to test whether the reported river and ocean positions hold, improve or weaken. That makes Viking Holdings a cleaner read on travel demand than on the direction of the AI trade itself.

Bull and Bear Cases for the Ex-AI Rotation

Bull case: Continued weakness in a group representing about 45% of the S&P 500 could keep broadening market leadership. Defensive funds already gained 7% to 10% this month, Berkshire Hathaway Class B shares rose 8% this month, and the Goldman Sachs ex-AI index demonstrated that excluding perceived AI enablers did not prevent benchmark-like returns through Oct. 22.

Bear case: The advantage was small and proved sensitive to a technology rebound. The ex-AI measure was only modestly ahead at 12.4% versus 12% through Oct. 22, and Monday’s technology rally brought the indexes back toward parity. Renewed technology strength could quickly restore the standard S&P 500’s advantage because of its large tech and AI-related weight.

The evidence supports diversification more strongly than a permanent regime change. Future performance for AI, non-AI, defensive and technology investments is unknown, and the undisclosed full composition of the ex-AI index limits precise comparisons.

Checkpoints That Could Confirm or Reverse the Shift

• Compare the indexes on the same measurement date: The established baseline is the Goldman Sachs ex-AI index at 12.4% and the S&P 500 at 12% through Oct. 22. A later comparison needs matching dates before it can confirm sustained outperformance.
• Track technology against defensive funds: Watch whether the S&P 500 technology sector’s roughly 7% decline this month persists as the three named State Street defensive ETFs retain their 7% to 10% gains this month.
• Separate diversification from pure ex-AI exposure: Berkshire Hathaway owns Geico and Burlington Northern Santa Fe railroad, though its $364 billion stock portfolio also includes Apple and Alphabet. Its performance should not be treated as a clean inverse of technology.
• Use company events as independent tests: Monitor Eli Lilly’s planned regulatory filing early in 2027 and Viking Holdings’ future booking updates. Those checkpoints can validate their individual operating narratives without assuming that every non-AI company benefits from the same market mechanism.

The live question is whether broader participation survives the next technology rebound. If defensive funds, Berkshire Hathaway, Eli Lilly and Viking Holdings keep their relative strength while the ex-AI index remains competitive on matched dates, the rotation will look more durable. If technology recovers and the standard S&P 500 pulls ahead again, the brief ex-AI lead will read as a tactical interruption rather than a settled change in market leadership.

This article was independently written by OneDayTrading from public reporting. Read the original (CNBC)