Why is the report recommending traditional stocks now?

Because AI stock valuations have reached nosebleed levels, making defensive and materials stocks safer alternatives.

Does the report predict a decline in AI stocks?

No, the report does not predict a decline but advocates diversification to reduce risk.

AI Stocks at Nosebleed Levels: 9 Safer Alternatives Including Walmart and Exxon

With the Nasdaq at record highs, Barron's recommends considering 9 traditional companies like Walmart, Exxon Mobil, and Coca-Cola as alternatives to overvalued AI stocks. The report highlights defensive and materials sectors as safer bets.

By: Wrqti Editorial

May 5, 2026

2 min read

Source: Barrons.com

As the Nasdaq continues to hit record highs, a recent report from Barron's suggests it's time to look beyond chips, AI, and software. The report recommends 9 old-economy companies as attractive alternatives amid elevated tech valuations.

The Recommended Stocks

The list includes companies from consumer defensive, energy, and basic materials sectors:

Walmart (WMT) – retail giant.
Costco (COST) – warehouse club.
Coca-Cola (KO) – beverages.
Exxon Mobil (XOM) – energy.
Linde (LIN) – industrial gases.
Plus 4 other companies not named in the summary.

Why These Stocks Now?

With AI stock valuations at "nosebleed levels," analysts see defensive and materials stocks as offering better value and stability. These companies have strong cash flows and stable business models.

Context

The report comes as the Nasdaq continues to hit record highs driven by AI-related tech stocks. However, concerns over frothy valuations are prompting some investors to seek safer havens.

What This Means for Investors

The report does not recommend selling AI stocks but advocates diversification. The mentioned traditional stocks may provide protection in case of a tech correction, though they may not offer the same rapid growth.

Frequently Asked Questions

The report named five: Walmart, Costco, Coca-Cola, Exxon Mobil, and Linde. The other four were not disclosed in the summary.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.