AbbVie logo on a modern glass office building with metal columns, South San Francisco, California, October 16, 2025.
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Jefferies recommends holding high-quality, low-stress stocks to get through the summer as concerns surrounding investments in artificial intelligence add to market volatility.
AI-related questions range from potential overcapacity, the benefits hyperscalers will earn from investing an estimated $700 billion in capital expenditures and rising token costs, and fees paid for AI models, according to a memo from Jefferies head of quantitative strategy Desh Peramnetileke.
As evidence of the popularity of AI in general, the S&P 500 Momentum Index has outperformed the broader stock market by more than 70% since 2024, close to levels seen during the dot-com bust of the 1990s. Before the outbreak of war with Iran, the Momentum strategy included materials and defense stocks, but now AI is the only one in the lead, “increasing the risk of a reversal of negative momentum,” the strategists wrote on Monday.
“While we still think this theme is a long-term winner, AI-driven momentum could be reversed for the reasons listed above,” Peramunetileke said.
Peramnetileke and his team recommended a list of so-called high-quality companies with low momentum to weather a potential AI-driven storm.
Jefferies looked for companies with high quality scores, market value greater than $10 billion, solid fundamentals, and long-term free cash flow yields greater than 3%. This group also needed to include stocks with limited momentum, attractive valuations, and selling for less than 20 times expected earnings over the next year.
Here are 10 stocks from Jefferies’ list.
pharmaceutical company AbbVie Received the highest quality score from Jefferies. This gives the company nearly 28% compound annual growth from 2026 to 2027 and a free cash flow yield of 5.2%, making it one of the strongest growth and cash flow combinations on our list.
In its first quarter financial report, AbbVie reported global net revenue of $15 billion, primarily driven by its $7.3 billion immunology portfolio. AbbVie agreed last week to acquire Apogee Therapeutics for $10.9 billion, strengthening its next-generation immunology pipeline in its largest acquisition in more than five years.
Chicago-based AbbVie is scheduled to report second-quarter results on July 31st. The company’s stock has risen 25% in the past three months and 37% in the past year, giving it a yield of 2.7%, based on FactSet data.
Netflixhas a market value of $320 billion, a free cash flow yield of 3.6%, and shares a high quality score in the Jefferies model. The dominant streaming platform forecast second-quarter revenue to rise 13%, despite warning that content spending would be focused in the first half of the year due to the timing of title launches.
The streaming giant’s stock fell 10% in mid-April after its second-quarter outlook fell short of Wall Street expectations, leaving its full-year outlook unchanged.
Netflix is scheduled to announce its second quarter financial results on July 16th. The stock is down 18% so far through 2026 and almost 41% in the past 12 months.
Other companies using Jefferies’ high-quality, low-stress screens include: Lowe’s Companies, mcdonalds and american express.
