By Jacob Sonenshine

Artificial-intelligence stocks are once again in rally mode. Most of them are super volatile, but a small cohort of them isn't.

Let's use semiconductor stocks as the AI barometer. They're seeing exploding demand from companies that are building data centers to support their AI, and they are the clear poster child for the AI trade.

The VanEck Semiconductor exchange-traded fund, home to major chip makers Nvidia, Advanced Micro Devices, Broadcom, Micron Technology, Taiwan Semiconductor, and manufacturers of semiconductor equipment, is up 10% from the early June bottom of a large decline.

That's because dip-buyers keep coming in after profit-taking, or selling. The buyers are excited by the growth, while the sellers won't forget that, one day, software companies such as Microsoft and Oracle, as well as real-estate developers, will have built most of the data-center capacity that's needed and will drastically slow the growth in their investments. They also can't forget the eerie reality that the S&P 500 semiconductors index has traded similarly to the way it did in the late 1990s -- just before the dot-com bubble burst.

That all explains the volatility. From this past Thursday through Tuesday, the chip ETF has gained or lost more than 1% every trading day. While there are no indications of slowing chip demand and these stocks still have plenty of potential, they come with high volatility. Any time you hear that word, just think "risk."

The good news: There are AI stocks that can benefit from the boom, and they don't come with the same level of volatility.

Trivariate Research's Adam Parker wanted to find stocks that are in safer sectors, so he screened for companies with AI revenue that are in the utility and real-estate sectors. While he wasn't looking specifically for stocks that are less volatile, stocks in these sectors tend to be more stable. Many utilities have long-term, guaranteed contracts from data-center customers that sign up to acquire certain amounts of power for years to come, making their profits more predictable. (Some utilities also have stable residential businesses.) Data-center real estate investment trusts generate rental income, making their profits relatively predictable, too.

Among the stocks on Parker's list, a bunch held the line particularly well on Friday June 5, when the chip ETF dropped 9.2% in one day. REIT American Tower rose 0.1% that day, while Digital Realty Trust dropped only 1%, and Equinix slipped 0.8%.

In electric utilities, American Electric Power gained 1.1%, while Southern Company rose 1.1%, Portland General Electric jumped 1.7%, OGE Energy increased 1.8%, Entergy gained 1.3%, and NextEra Energy increased 0.2%.

These stocks are generally less volatile. While most of those chip makers have "betas" greater than 1 -- meaning their daily moves in the last few years have been larger than the S&P 500's moves -- all of the stocks above have betas below 1. Essentially, they're less risky than the market -- and far less risky than chip stocks.

The caveat -- remember, there's no such thing as a free lunch -- is that their expected growth isn't as high as the chip makers' growth. Many of these companies have non-data-center businesses that aren't expected to see high growth and are the most stable out of all of these companies' business segments. But many utilities with data-center businesses, for example, are positioning themselves to see double-digit percentage earnings growth for years to come. Those are solid returns -- with limited volatility.

Take a chance on some of these stocks.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

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June 16, 2026 14:15 ET (18:15 GMT)

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