Looking for some good stocks outside of AI? Bank of America suggested a few to clients

Bank of America has identified 16 undervalued S&P 500 stocks outside the concentrated AI trade, offering alternative opportunities amidst elevated tech valuations. Their screening process targeted buy-rated companies not included in AI-related ETFs, trading below the market's 26x multiple, and at least 10% off their 52-week highs. Key recommendations include Amcor, cited for attractive valuation and strategic initiatives; Freeport-McMoRan, due to copper price upside and an anticipated mine restart; and Progressive, highlighted for robust policy growth and significant positive EPS revisions, aiming to uncover compelling investments beyond the current AI-driven market focus.

Analysis

Bank of America (BofA) identifies undervalued S&P 500 opportunities outside the concentrated AI trade, noting the top five tech giants comprise 30% of the index with elevated valuations. BofA screened for 16 buy-rated stocks not in AI-related ETFs, trading below the 26x market multiple and at least 10% off their 52-week highs, targeting investments with indirect AI exposure but without the associated valuation premiums.

Amcor (AMCR) is highlighted for its attractive valuation (2026 P/E below group average) and strategic initiatives post-Berry Global acquisition. Despite being down nearly 10% YTD, AMCR shares rose over 7% this month after exceeding Q1 earnings estimates. Freeport-McMoRan (FCX), 19% below its 52-week high, received a buy upgrade from BofA, driven by the anticipated Grasberg mine restart and a bullish outlook on copper prices.

Progressive (PGR) is another key pick, 26% off its 52-week high, with BofA bullish on its continued policy count growth and exceptionally strong positive EPS revisions. The firm estimates consensus EPS forecasts for PGR remain significantly too low, emphasizing fundamental value and diversification from the current tech-heavy market.

Key Decisions for Investors

• Investors should consider diversifying portfolios by allocating to BofA's identified value-oriented S&P 500 stocks, particularly given the current market concentration and elevated valuations within the AI trade.
• Evaluate Amcor (AMCR) for its attractive valuation and recent earnings beat, and Freeport-McMoRan (FCX) for its copper price upside and mine restart catalyst.
• Monitor Progressive (PGR) closely, as its strong policy growth and significant positive EPS revision potential suggest substantial upside not yet priced into consensus forecasts.