Buy These Boring “Anti-AI” Stocks With Predictable Cash Flows
Listen to the audio version of this article (generated by AI).
In This Digest:
- These “anti-AI” stocks are in healthy uptrends
- Here’s the one to buy now
- How to play the bounce in the nuclear trade
Spare a thought for Leopold Aschenbrenner…
One day, the 24-year-old former OpenAI researcher was running a red-hot AI hedge fund and being hailed across Silicon Valley as a kind of AI prophet.
The next, he was watching his fund’s stock portfolio lose 67% of its value – in a single month.
His fund – called Situational Awareness, after a viral essay he wrote about the future of AI – opened its doors in September 2024. At its peak early in July, it managed about $45 billion.
Then it all came undone. How?
Reports say Aschenbrenner was running up to 4-to-1 leverage – Wall Street’s term for using borrowed money to supersize your trades.
It works beautifully when you’re right. It’s brutal when you’re wrong.
This summer, the AI trade went against him. His creditors called in their chips, and he had to sell his stocks to pay them back.
Aschenbrenner was forced to sell his entire public stock portfolio – worth about $16 billion – to Wall Street titan Ken Griffin at Citadel, at a discount.
This doesn’t mean the AI trade is dead. Griffin is one of the shrewdest operators in the business, and he was happy to scoop up billions of dollars of AI stocks on the cheap.
But it does mean you want your wits about you.
As we’ve been sharing here in TradeSmith Daily, we’re in what our CEO Keith Kaplan calls a “Mega Melt-Up” – a frenzied bull market driven by a revolutionary new technology, easy credit, and millions of new investors piling in.
And at times like these, diversification is your best friend. As Keith put it in his piece on diversification last Friday:
[Investors] own a handful of different stocks, and it feels diversified. But if most of those stocks rise and fall on the same narrative – say, one involving a breakthrough new technology set to transform the world – they’re not as diversified as they think.
So today, let’s get into how to broaden your portfolio beyond the AI trade – into a “boring” corner of the market with steady, predictable cash flows.
Right now, this is the healthiest sector we track on our platform…
An important practice for TradeSmith subscribers is to monitor the health of stocks and exchange-traded funds (ETFs) you own in your portfolio.
And just as important is the health of the ones you’re thinking of buying.
Take the financial sector. You can track it through the Financial Select Sector SPDR Fund (XLF) – a basket of the biggest financial companies in the S&P 500.
It’s the healthiest market sector of any we track on our analytics platform, TradeSmith Finance:
Of the 76 stocks in XLF, 87% are in the Short-Term Health Green Zone. That means they’re in healthy short-term uptrends – their prices are behaving well against their own normal ups and downs.
And close to 90% are in the Long-Term Health Green Zone – a sign the longer-term trend is healthy, too. This strength isn’t just a short-term blip.
These aren’t the high-octane AI stocks or speculative space companies that have been popular this year. They’re the opposite. They’re boring financial firms with steadier, more predictable earnings, and their prices are trending up.
Compare that to the Communication Services Select Sector SPDR ETF (XLC), which holds tech and media giants like Meta Platforms (META), Alphabet (GOOGL), Disney (DIS), and Netflix (NFLX).
Most of the stocks XLC trades are in Short-Term Health Red Zones. And about a third of these stocks are in Long-Term Red Zones.
Don’t fall into what Keith calls the “monoculture trap” – letting too big a chunk of your portfolio pile into AI stocks. Make sure you own stocks in other sectors, too.
Our indicators are clear: If you’re following the trend, Financials are a better place to be right now than big tech and AI plays.
If you’re going to buy one financial stock, make it this one…
Of all the stocks in the Financials sector, Allstate (ALL) is the clear outperformer to own for the long haul. It sells car insurance, home insurance, and related coverage to millions of Americans.
Take a look at this chart:
ALL fired its Long-Term Health Green signal on November 1, 2023. Since then, the stock went on two big runs:
- From our entry to November 2025, where it rose about 62% before a brief dip into the yellow.
- And then after a period of slow grind higher, recently leapt almost 25% from June through to today.
And ALL is still cheap. It’s trading at about six times earnings, while having a Business Quality Score – TradeSmith’s 21-factor fundamental rating system – of 92.
If you’re too exposed to AI and chip stocks after their incredible run this year and want some lower-risk diversification, ALL is a good place to focus.
Despite the selloff in nuclear, this is a stock to watch…
Nuclear was a white-hot trade in 2025.
Everyone wanted a piece of it as a way to play the AI power boom. The Global X Uranium ETF (URA) – which holds uranium miners and nuclear-fuel companies – ran up as much as 120%.
As you can see below, it then went on to fall 26%. But it’s now starting to bounce.
One stock our MegaTrends editors, Andy and Landon Swan, are watching closely is small modular reactor (SMR) maker Oklo (OKLO).
SMRs are smaller, factory-built nuclear reactors – small enough to sit right next to a giant data center and power it directly. That makes them one of the most talked-about ways to feed AI’s enormous appetite for electricity.
And Oklo just gave the market plenty to talk about. This month, its Groves test reactor reached “first criticality” – the point where a reactor sustains a nuclear reaction on its own.
That came on the heels of a green light from the Department of Energy and a string of partnerships with data-center operators. For a company still years from full commercial power, those are real, concrete steps forward.
That’s just part of what has the Swans paying attention.
Because despite the recent bearishness around the nuclear trade, Oklo’s Social Heat Score has been rising.
Think of Social Heat as a Geiger counter for public interest. It scans hundreds of millions of data points a day – not just social media posts, but web traffic to a company’s site and search activity – and boils them into a single number.
When that number climbs, it means interest in a company is building. And for a company like Oklo, whose whole future depends on landing customers and contracts, rising interest can be an early tell that something is brewing.
Oklo’s Social Heat Score reads 84.9 – one of the higher readings in the group.
This isn’t the first time our data caught this one early.
Oklo’s Social Heat Score first turned bullish – a reading of 79 – back on April 28, 2025. The Swans recommended it that day to their subscribers. By Sept. 24, they recommended selling the stock for a 461% gain on half the position in less than six months.
Just keep it in perspective. Oklo doesn’t turn a profit yet, and the stock trades about 78% below its high.
This is a small, speculative bet – the kind you keep to a sliver of your portfolio, not a sleep-at-night holding. If you do wade in, size it small and know your exit before you buy.
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily