Investors are moving capital out of high-flying artificial intelligence and technology stocks and into defensive sectors, with healthcare emerging as a major beneficiary. Concerns about the AI boom’s massive capital spending, rising borrowing costs and uncertain profitability are driving the shift toward safety.
Healthcare has been among the S&P 500’s best-performing sectors, erasing its long-standing valuation discount to the broader market. Investors widely view the rotation as a warning sign, favoring healthcare companies such as Eli Lilly and UnitedHealth for their stable, less cyclical earnings over the momentum of technology stocks.