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Investing.com -- Bank of America analysts said investor enthusiasm around artificial intelligence has left a range of attractively valued companies overlooked, identifying 16 “non-AI” opportunities that combine solid earnings momentum with discounted valuations.
The bank screened for Buy-rated U.S. stocks excluded from AI, power, and infrastructure exchange-traded funds (ETFs), with positive three-month earnings revisions and valuations below the S&P 500’s 26x multiple.
After analyst review, they narrowed the list to 16 names across multiple sectors. These include Amcor, AT&T, BGC Group, Church & Dwight, Dollar General, Eversource Energy, Freeport-McMoRan, Henry Schein, J.B. Hunt, KeyCorp, McCormick, Oneok, Progressive, Regency Centers, Viking Holdings, and Walt Disney.
BofA analysts said the broader market’s fixation on AI “may be missing other opportunities,” noting that while some of these stocks have indirect AI exposure, such as Freeport-McMoRan through copper demand, they are “not trading like companies directly exposed and the AI exposure may be overshadowed by other concerns.”
Savita Subramanian, head of U.S. equity strategy, projects an 8% 12-month return for the S&P 500 and continues to expect performance broadening beyond megacap tech. She warned that if AI-related efficiency gains reduce demand for middle-income white-collar jobs, consumer spending could weaken.
The strategist also pointed out that hyperscalers’ capital spending now rivals that of U.S. oil majors while trading at record multiples.
“If AI monetization disappoints, hyperscalers are poised to de-rate,” BofA’s note states.
Among some of the highlighted names, Amcor offers upside from its Berry Global acquisition and trades below 10x forward earnings, while AT&T’s free cash flow yield near 10% supports what BofA calls a “14% total return profile.”
Dollar General’s improving store execution and trade-down trends underpin its recovery, and Eversource’s regulatory outlook has improved following leadership changes in Connecticut.
Analysts also cited compelling cases in Industrials and Financials, from J.B. Hunt’s cost savings to KeyCorp’s leverage to a rebound in domestic capex.
Progressive and Regency Centers stood out for resilient earnings growth and defensive cash flow, while Viking Holdings and Disney were seen benefiting from strong travel and entertainment demand.