The Antidote to AI Anxiety: High Quality Stocks

By Mike Burnick

AI anxiety has taken hold of the stock market in recent weeks. 

From Software and Financial Services to Cybersecurity, Transportion, and even Legal & Consulting, one sector after another has been laid low due to fears of AI-obsolescence. 

And it’s easy to understand why: Artificial intelligence models and their AI-powered agents threaten to transform stocks in these sectors from innovative, high-margin businesses into lumbering dinosaurs headed for extinction. 

While a lot of this is speculation, this AI anxiety may prove true for some companies no longer on the cutting edge of consistent improvement.  

After all, businesses that don’t possess a durable competitive advantage typically suffer from the laws of “creative destruction.” 

But AI is not going to creatively destroy every company in every one of these industries overnight either.  

And the plunging prices of stocks in these sectors due to the AI-induced panic are also creating opportunity. 

There is a simple antidote to AI obsolescence – and to market volatility. And it just so happens to be my favorite investment style: quality! 

Quality Is AI-Proof 

Quality stocks tend to have “wide moats” defending their “castles” from competitive threats – including threats from AI disruption.  

A moat in this case is simply a durable competitive advantage a business possesses over other potential competitors. Often, that advantage comes from scale – or companies that have dominant market share in a particular industry.  

Other types of moats are companies that have a large, loyal customer base or companies that provide very unique products or services. 

These companies also share superior financial metrics that help you spot their quality from a mile away. And that’s where our TradeSmith Business Quality Score (BQS) comes in handy. 

BQS is a unique metric TradeSmith designed to find high-quality stocks with growing earnings, financial strength, high profit margins, and safety. 

In other words, stocks that enjoy durable competitive advantages. 

BQS considers the critical traits of stocks proven to outperform the market over the long run, including:  

  • Growth in sales, earnings, and cash flow, along with high returns on equity and assets  
  • Profitability relative to both its own history and to other stocks 
  • Safety, including low debt, minimal risk, and low volatility  
  • Payout, or how profits get reinvested to enrich shareholders and grow the business  

Our BQS ranks every stock from zero (lowest quality) to 100 (highest quality). Stocks with a BQS between 80 and 100 are considered high quality.  

Using BQS as the primary filter, our TradeSmith Screener can help you find quality stocks that are unlikely to get disrupted by AI anxiety! 

Simply log into your TradeSmith Finance account, click on Invest from the main menu, then select Screener from the sub menu.  

Please Note: If you are a TradeSmith Platinum member, subscribe to Trade360, or Trade Cycles, then you have full access to our Screener.  

If you don’t see this on your dashboard – and would like to – please contact our Customer Care team at 888-623-0858 to find out more.  

Combining Quality and Timing 

Finding quality stocks is powerful. Finding quality stocks at the right time is even better.  

So I created a screener with a few simple filters that searches for healthy, high-quality stocks that have recently pulled back due to AI anxiety. 

To boost my conviction level that these stocks could rebound soon, I also included several of our Trade Cycles timing filters shown below:  

  • Health Indicator:  Green and Yellow Zone (healthy stocks) 
  • Business Quality Score: Greater than 80 (top 20% of stocks ranked by quality) 
  • Cycle Turn Area: Valley 
  • Cycle Period: Composite Cycle 
  • Cycle Conviction: Very High, High, and Medium 
  • Days to Cycle Start Date: 0 to 60 
  • One Month Change: Less than 0% 

Our Trade Cycles filters are designed to uncover stocks that are now – or soon will be (within the next 60 days) – in a Valley turn area with a medium to very high conviction level. 

Just as nature follows repeating seasonal patterns, so do financial markets. Our Cycles filters help you anticipate potential turning points in stocks, ETFs, and indexes. 

At a glance, you can see whether a stock is at or near a Cycle Peak (high) or Valley (low), which indicates a change in trend. A stock in a Valley turn area is likely to move higher. 

But you don’t have to limit yourself to just these filters. Simply click on + Add Filter to add more proprietary TradeSmith indicators.  

Plus, you can also customize your screen with fundamental, valuation, market classification, and other filters.  

When I ran this screener yesterday using the filters above, I got 30 results. That’s a good starter list for additional research.  

Due to space limitations here, the top 10 results are shown below, sorted by BQS with the highest-quality stocks at top. 

Two moat-protected companies made the cut: Rayonier (RYN) and Airbnb (ABNB). 

Rayonier is a REIT that manages nearly three million acres of prime timberland – an asset-rich business. Could AI obsolescence disrupt its business?  

I doubt it. AI can’t plant and harvest trees … at least not yet. 

As for Airbnb, it’s a technology company, so AI could be a threat.  

But its business has a big moat and high castle walls, thanks to a user base of 275 million members that made half a billion bookings last year alone. 

For my money, these stocks – among many others in these results – have been unfairly victimized by AI anxiety, and now the stocks are on sale, which spells opportunity. 

Here’s another way to sort the results to pinpoint other quality stocks that may have fallen due to AI anxiety.  

We know all stocks that made the cut for this Screener are quality (BQS above 80%), so another way to sort is by One-Month Change, by clicking on this column shown below to sort by performance.  

Here, we see the 10 high-quality stocks that are down the most over the past month –perhaps due to misguided AI anxiety. 

And sure enough, another blue-chip name makes the cut: American Express (AXP).  

Will Amex get disrupted by AI? Probably not. After all, it is in one of the oldest professions.  

No, not that one – I mean money lending! 

And the company has a wide moat, with 141 million loyal customers who view their Amex card as a status symbol … “Don’t leave home without it.” I never do. 

If anything, AXP can harness AI to improve its business by targeting more credit-worthy customers, leading to less losses and higher profit margins. 

Mike Burnick’s Bottom Line: AI anxiety has hit plenty of stocks and sectors hard. This includes high-quality stocks that have perhaps been unfairly tarnished. The TradeSmith Screener above is a great way to uncover potential winners that are on sale due to overblown AI fears. 

Good investing, 

Mike Burnick 
Senior Analyst, TradeSmith 

P.S. AI anxiety has pressured even the well-known AI leaders – and pulled many quality stocks down with them.  

That’s why it pays to look where others aren’t.  

Last night, my colleagues, Jeff Brown and Jason Bodner went live to reveal a different way to play the AI boom in 2026: what we call “Secret AI Stocks.” 

These aren’t the crowded, headline names. They’re companies hiding in plain sight – businesses most investors wouldn’t label as AI plays… until the market suddenly does.  

It’s the same kind of setup we’ve seen before with stocks like Nvidia (NVDA) in 2016 and Super Micro Computer (SMCI) in 2022 – opportunities that rewarded investors who recognized the signals early.  

If you missed the event, you can still catch the full replay and see the specific stocks we’re targeting for the next phase of AI growth. 

Because when our system flashes a buy, timing matters. 

You can watch the replay and get the details now – while there’s still time.