By Ian Salisbury

With Wall Street worried artificial intelligence is coming for white-collar jobs, hard-hat and other "real economy" stocks are suddenly fashionable again.

It has been a difficult few weeks for stocks that look vulnerable to AI disruption, with selloffs rocking everything from software to financials to media.

By contrast stocks that operate in the tangible economy of steel, rubber and concrete and regularly return profits to shareholders, have been seeing prices surge.

"The relative winner is asset-heavy cash returners," wrote 22V Research President Dennis DeBusschere in a note Friday, highlighting strong performance of materials, energy, real estate investment trusts, and staples -- all sectors that have outperformed the S&P 500 , which is essentially flat in 2026.

"Investors are rotating to the margin of safety in businesses with a book value and cash return," he adds. "It isn't purely defensive because recession risk is not materially higher; the macro risk is financial conditions tightening and growth slowing, not recession."

Blue-chip focused ETFs like Schwab U.S. Dividend Equity ETF, which is up 14% this year are thriving, thanks to top performers like oilfield services firm SLB, up 33%; defense giant Lockheed Martin, up 32%; and appliance maker Whirlpool, up 25%.

Firms with strong track records of stock buybacks are also doing well. While plenty of investors love income, many CEOs prefer buybacks, which tend to be more tax-efficient. In aggregate, U.S. companies spend about $1 trillion a year on buybacks, according to S&P, compared with $665 billion on dividends.

"During economic slowdowns or recessionary environments, one of our favorite strategies is buying companies consistently buying back shares on a net basis," wrote Wolfe Research Chief Investment Strategist Chris Senyek in a note Wednesday. "This cohort of stocks has generally outperformed heading into and throughout recessions."

Wolfe tracks a list of what of what might be called, buyback aristocrats, companies that have bought back shares for 10 consecutive years. The list includes names like Walmart, which has bought back around 1.1% of its shares in the 12 months; as well as names like Colgate-Palmolive, Honeywell International, Northrop Grumman and trucker Old Dominion Freight Line -- all names whose shares have increased by double digits in 2026.

The fund is up nearly 11% in 2026. Among the ETF's top performers are Dow Inc., up 40%; Exxon Mobil and petroleum refiner HF Sinclair, both up 25%.

Write to Ian Salisbury at ian.salisbury@barrons.com

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(END) Dow Jones Newswires

February 13, 2026 13:18 ET (18:18 GMT)

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