Buy these quality, low-stress stocks for the summer, says Jefferies

Jefferies recommends owning quality, low-stress stocks to get you through the summer months as markets become more volatile amid rising concerns about investing in artificial intelligence.

Questions about AI range from potential overcapacity, profits that will come from hyperscalers investing an estimated $700 billion in capital spending, and rising costs for tokens to fees paid to AI models, according to a note from Desh Peramunetilleke, head of quantitative strategy at Jefferies.

As a testament to the popularity of all things AI, the S&P 500 momentum index has outperformed the broader stock market by 70% since 2024; This rate is close to levels seen during the dot-com run of the 1990s. Before the outbreak of war with Iran, momentum strategies included materiel and defense stockpiles, but now AI is carrying the ball alone, “increasing the risk of unwinding negative sentiment,” the strategist wrote on Monday.

“While we still see the theme as a long-term winner, the above reasons may cause the AI-led momentum to weaken,” Peramunetilleke said. he said.

Peramunetilleke and his team proposed a list of what they call high-quality companies with low momentum to weather potential AI-induced storms.

Jefferies was looking for companies with a high quality score, market capitalization over $10 billion, solid fundamentals, and long-term free cash flow yield above 3%. The group also had to include stocks with limited momentum and attractive valuations selling for less than 20 times expected earnings next year.

Here are 10 stocks from Jefferies’ list:

pharmaceutical manufacturer AbbVie Received the highest quality score from Jefferies; This score shows the company growing compound annual earnings growth to nearly 28%, with a free cash flow yield of 5.2% in 2026-2027, one of the strongest combinations of growth and cash flow on the list.

AbbVie in its first quarter financial report reported $15 billion Worldwide net revenues were largely driven by the $7.3 billion immunology portfolio. Last week, AbbVie strengthened its next-generation immunology pipeline after agreeing to acquire Apogee Therapeutics for $10.9 billion; it was the largest acquisition in more than five years.

Chicago-based AbbVie will report second-quarter results on July 31. The stock is up 25% in the last three months and 37% in the past year, giving it a return of 2.7%, according to FactSet data.

netflixWith a market capitalization of $320 billion and a free cash flow yield of 3.6%, it also posted a high quality score in Jefferies’ model. The dominant streaming platform is forecasting 13% revenue growth in the second quarter, despite warning that content spending will weigh on the timing of content launches in the first half of the year.

Shares of the streaming giant fell 10% in mid-April after its second-quarter forecast fell short of Wall Street expectations and full-year forecasts were left unchanged.

Netflix will release the second quarter Results are on July 16. The stock is down 18% so far in 2026 and is down almost 41% in the last 12 months.

Other companies in Jefferies’ quality, low-stress display include: Lowe’s Companies, McDonald’s And American Express.