The S&P 500 Becomes an AI-Focused Index: Stocks to Diversify Your Portfolio Against Potential Setbacks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 20 2025
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Source: CNBC
Investor Caution on AI Stocks: With high valuations in AI stocks, investors are advised to diversify their portfolios, as the S&P 500 is heavily influenced by tech and AI-related companies. Trivariate Research's Adam Parker suggests that the current market conditions resemble a "rational bubble," with potential risks for investors.
Stock Performance and Recommendations: Parker recommends looking for stocks with low correlation to AI semiconductors that have shown at least a 10% increase over the last six months, are of high quality, and have lower volatility. Notable companies like Walmart and Netflix are highlighted for their performance and strategic use of AI, while Welltower is expected to benefit from the aging population in the senior housing sector.
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Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NFLX is 129.47 USD with a low forecast of 92.00 USD and a high forecast of 152.50 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
38 Analyst Rating
27 Buy
9 Hold
2 Sell
Moderate Buy
Current: 84.640
Low
92.00
Averages
129.47
High
152.50
Current: 84.640
Low
92.00
Averages
129.47
High
152.50
About NFLX
Netflix, Inc. is a provider of entertainment services. The Company acquires, licenses and produces content, including original programming. It provides paid memberships in over 190 countries offering television (TV) series, films and games across a variety of genres and languages. It allows members to play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. The Company offers members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices. It is engaged in scaling its streaming service, such as introducing games and advertising on its service, as well as offering live programming. It is developing technology and utilizing third-party cloud computing, technology and other services. The Company is also engaged in scaling its own studio operations to produce original content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Stock Split Impact: The announcement of a 10-for-1 stock split provided a temporary boost, yet concerns over the proposed acquisition of Warner Bros. have led to a 27% decline in stock price over the past six months, reflecting market uncertainty about future prospects.
- Acquisition Potential: Netflix's plan to acquire Warner Bros. for $82.7 billion, while increasing debt, could unlock significant value by leveraging Warner's extensive content library alongside Netflix's data-driven content creation capabilities, presenting substantial growth opportunities.
- Market Competition and Opportunities: Despite fierce competition, Netflix remains a leader in the streaming sector, with management noting that it commands less than 10% of TV viewing time in its most advanced markets, indicating ample room for growth, making the current stock dip an attractive buying opportunity.
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