Portfolio Cuts AI Winners, Adds 2 Defensive Stocks as Fed Hike Odds Jump to 58%
Updated
Updated · CNBC · Sep 5
Portfolio Cuts AI Winners, Adds 2 Defensive Stocks as Fed Hike Odds Jump to 58%
3 articles · Updated · CNBC · Sep 5
Summary
Palo Alto Networks and Corning were trimmed or exited last week as the portfolio rotated away from overheated AI winners, while BNY and Kimberly-Clark were added at roughly 1% weightings and Micron was increased to about 1%.
58% September Fed hike odds, higher oil prices and a strong August jobs report pushed Treasury yields up, with the 2-year yield reaching its highest since January 2025 and pressuring risk appetite for AI-linked stocks.
Broadcom showed the tougher backdrop: despite upbeat results and a raised fiscal 2027 AI revenue forecast to $115 billion, its shares fell 3% and the portfolio cut its price target to $430 from $480.
Palo Alto also beat expectations and kept the long-term AI cybersecurity case intact, but profit-taking still drove the stock down more than 10% for the week, making it the portfolio's worst performer.
Nvidia was the main exception, rising 6% after its $12.9 billion Hugging Face deal strengthened its AI ecosystem; the S&P 500 still gained 0.1% and the Nasdaq 0.4% for a fifth weekly advance in six.