Where to Invest $10,000: How to Prepare for a Further Downturn in the AI Sector

Last week, the market experienced a massive sell-off as investors once again feared that the huge investments in AI would not pay off. On Monday, November 9, the markets recovered some of their losses. But Pavel Pakhomov, director of the analytics department at the international trading platform ITS, believes it is too early to say that the correction in the technology sector is over. He has selected three stocks that could serve as a hedge against further market declines and, at the same time, as an alternative to the overheated AI sector.

The hype surrounding AI has sharply subsided, and last week’s sell-off spooked many investors. Of course, it’s possible to find something worthwhile and undervalued in the AI sector, but in my view, the “investment vacuum cleaner” has done its job thoroughly in the tech sectors, and there are no such assets left.

Some people may now be tempted to buy stocks that have fallen in price following the market crash. And judging by how the market is rebounding (the Nasdaq 100 rose 3.4% on November 9), it’s clear that there are many such investors. Or, for example, to buy shares in the outstanding company Nvidia, whose stock price has fallen to levels last seen in April of this year.

So right now, it's more important to focus on not losing money than on making a lot of money.

In today’s unstable and highly volatile environment, perhaps we should look for the Holy Grail not so much in high-yield, high-risk big-tech stocks as in defensive assets and stocks of companies with well-established, stable businesses. This is precisely the basis for my current selection.

Good old General Electric, which had been through fire, water, and copper pipes and found itself on the brink of disaster in the 2010s. But after spinning off its businesses, the company focused on what it does best—aircraft engines. And it paid off.

In late October, GE Aerospace reported strong third-quarter results—a 16% year-over-year increase in adjusted revenue, a 30% increase in operating profit, and a 49% increase in orders. Strong demand for commercial engines and high-quality after-sales service drove double-digit growth in revenue and profit.

Boeing has also helped: disruptions in the delivery of new aircraft are driving up demand for aircraft engine repairs, which GE Aerospace “welcomes.”

GE Aerospace’s Commercial Engines and Services (CES) division remained the primary driver of growth. Its revenue grew 21% to $10.34 billion. Revenue from commercial services increased 17%, driven by stronger maintenance activity, with the number of LEAP engine shop visits continuing to rise. CFM International, a joint venture between GE Aerospace and Safran, supplies LEAP engines for popular narrow-body aircraft, including the Boeing 737 MAX and Airbus A320neo families.

In the defense and energy technology sectors, the company's orders rose by 18%, to $4.27 billion.

In addition, the aerospace giant also raised its annual forecasts across all segments, emphasizing that it continues to increase spending on commercial aviation and defense.

Walmart is not only a supermarket chain but also one of the largest online retailers, successfully competing with Amazon itself. And it is this combination of brick-and-mortar and online retail that makes the company extremely attractive.

After a decline during the summer months, the company’s shares once again saw strong demand from investors in the fall; since early September, the stock price has risen by nearly 20% and is heading toward its all-time highs. I believe the company’s quarterly earnings report on November 19 will be solid and largely unproblematic, and we can then expect the stock price to break through resistance at its all-time high and rise above the historical high of $135. The next resistance level will be around $160, which implies a 27% upside potential from the November 9 closing price.

One of Walmart’s main growth drivers at present is its increased ambition in the area of online sales and related robotic delivery. Currently, more than 50% of Walmart’s e-commerce order fulfillment is handled through automated facilities, and the company continues to invest in its supply chain.

In recent years, Walmart has made it a priority to build more efficient fulfillment networks and reduce delivery times for customers. The company's goal is to ensure that 95% of the U.S. population receives their orders within one or two days.

In late October, Walmart signed a partnership agreement with Symbotic, a developer of robotic systems and software for warehouse automation, to implement more robotics technology at 25 of its distribution centers in the United States. The $6 billion investment in Symbotic represents an initial commitment spanning several years.

At the same time, Walmart plans to build a $400 million distribution center near San Antonio, Texas. According to state documents, the Theo project calls for the construction of a complex with a total area of approximately 744,000 square feet (69,000 square meters). Construction is scheduled to begin in February 2027 and be completed by August 2029. According to the San Antonio Express-News, the facility will provide at least 425 permanent jobs with salaries above the median wage in San Antonio.

In addition, America's largest retailer has begun another construction project, investing $1.3 billion in its sixth next-generation fulfillment center in Carnsville, Georgia. This project is expected to create 1,000 jobs in the area.

One of the leading manufacturers in the solar energy sector and another “sure bet” to invest in right now. The company manufactures solar modules used in large-scale power generation projects, allowing it to benefit from investments in renewable energy infrastructure.

The U.S. Democratic Party’s victory in both the House of Representatives and the Senate has prompted investors to reassess the outlook for renewable energy companies, and they expect that Democratic control of Congress will create a more favorable legislative environment for investments in clean energy and domestic solar panel manufacturing. First Solar is considered a potential beneficiary of such policies—thanks to its well-established manufacturing operations in the U.S. and its focus on thin-film photovoltaic technologies.

In early November, Mizuho analysts raised their price target for First Solar shares—from $324 to $328—and maintained their “Outperform” rating. This implies an increase of more than 70% from the closing price on November 9. The analysts did not change their forecast for First Solar’s average selling prices, indicating continued confidence in the company’s potential revenue. They also factored into their calculations the Section 45X tax credit for manufacturers of energy equipment and components, which is reflected on the company’s balance sheet. And in late October, First Solar itself approved a $500 million share buyback program.

All of this could provide additional support for the company's stock.

This is not an investment recommendation.

This article was AI-translated and verified by a human editor