Sick of hearing about the AI trade? BofA offers 16 hot stock picks that go far beyond tech.

Bank of America analysts are recommending 16 non-AI-related stock picks, advising investors to look beyond the potentially overvalued AI trade due to monetization risks and broader economic concerns. These 'overshadowed' companies, selected for their buy ratings, positive earnings revisions, and discounted valuations relative to their highs and the broader market, span diverse sectors such as consumer packaging (Amcor), telecom (AT&T), energy (Eversource, Oneok), retail (Dollar General), and entertainment (Disney, Viking Holdings), offering alternative growth and value opportunities.

Analysis

Bank of America analysts are advising investors to pivot away from the potentially overvalued artificial intelligence (AI) trade, citing concerns over record multiples for tech hyperscalers and the risk of AI monetization not meeting expectations. They also highlight potential downstream economic impacts on consumer spending if AI-driven efficiency reduces white-collar employment. This perspective suggests a cautious outlook on the sustainability of current AI-driven valuations.

In response, BofA has identified 16 "overshadowed" stock picks that are not direct AI beneficiaries but offer compelling value. These selections meet specific criteria: a buy rating, positive earnings revisions over the past three months, trading below their 52-week highs, and a discount to the broader market. This rigorous screening process aims to uncover opportunities in less-hyped sectors.

The recommended stocks span diverse industries, including consumer packaging (Amcor), telecom (AT&T), and consumer staples (Church & Dwight, Dollar General). Specific rationales include Amcor's strategic review, AT&T's fiber market positioning, and Church & Dwight's and Dollar General's ability to benefit from consumer trade-downs. Progressive (PGR) is highlighted for its significant positive EPS revisions, while Freeport-McMoRan (FCX) offers leverage to rising copper prices.

Key Decisions for Investors

• Consider diversifying portfolio exposure beyond high-valuation AI-centric growth stocks.
• Evaluate BofA's identified screening criteria (buy-rated, positive earnings revisions, trading below 52-week highs, market discount) as a potential framework for identifying overlooked opportunities.
• Research specific BofA picks like Amcor (AMCR), AT&T (T), Church & Dwight (CHD), and Progressive (PGR) for their unique catalysts and defensive characteristics.
• Monitor broader economic indicators such as consumer spending and employment trends, given BofA's concerns about AI's potential societal impact.