Worried about a tech bubble? Bank of America says investors can diversify with these 16 cheap non-AI stocks.
Bank of America highlights 16 undervalued non-AI stocks for investor diversification.
AI names have dominated recent S&P 500 returns, raising concerns of a tech bubble.
BofA’s picks span sectors like retail, utilities, finance, and entertainment.
Wait, there’s more to the market than just AI stocks?
You’d be forgiven for not realizing that these days. AI dominates the market narrative, and, to be fair, stocks in these sectors have driven a significant share of S&P 500 returns recently.
But pockets of opportunity do remain outside of AI, as Bank of America pointed out in a note to clients this week. Given investor concerns around how hot the AI trade has become, the bank had a team of analysts come up with a list of non-AI stocks they like most.
They picked out 16 companies, all of which are “Buy” rated by the bank.
“The market has been so focused on owning companies benefitting from AI investment — from semiconductors to power plants to hyperscalers to certain capital goods names — that the conversation may be missing other opportunities,” BofA analysts said.
“We thought it would be useful to highlight companies that aren’t generally considered direct AI beneficiaries but which our analysts find to be compelling,” the note continued. “Some of these stocks, like Freeport-McMoRan do have indirect exposure to AI but stocks we selected are not trading like companies directly exposed and the AI exposure may be overshadowed by other concerns.”
Below are the 16 stocks listed in alphabetical order. Commentary from the analysts is also included.
Commentary: “George Staphos’ Buy-rating on Amcor (AMCR) is supported by several strategic initiatives and potential improvements following the recent acquisition of Berry Global, and an attractive valuation.”
Commentary: “Investor skepticism around BGC’s recent push into interest rate futures has distracted from their energy business’s compelling secular growth characteristics.”
Commentary: “Anna Lizzul upgraded shares in April on the view that the value-oriented portfolio would translate to share gains. Slower wage growth and rising costs have continued to challenge the US consumer and we believe CHD benefits as consumers trade down.”
Commentary: “Our EPS estimates for ’26 and ’27 are modestly ahead of consensus,” the note said, adding: “We raised numbers in conjunction with our late October upgrade and expect a 5.8% EPS CAGR over the next several years.”
Commentary: “Lawson Winder upgraded shares following a selloff which was driven by news of the Grasberg mine accident and outage. Our estimate that it will cost $500mm in capex to repair the mine may be conservative and we believe the company’s restart timeline is unlikely to slip.”
Commentary: “Allen Lutz double upgraded HSIC earlier this year seeing a credible path for this best-of-breed dental distributor to resume compounding EPS growth at healthy high-single to low-double digit rates as it did consistently for the entire decade pre-COVID.”
Commentary: “Ken Hoexter is optimistic on the company’s positioning in the midst of rail M&A given that it is the largest domestic intermodal provider and its scale should allow it to adapt to industry changes.”
Commentary: “While regional bank stock performance could remain challenged near-term due to credit concerns and the lack of visibility on growth outlook, we think KEY offers an attractive risk/reward for investors, given the tailwind from back book repricing and leverage to a pick-up in domestic capex/sponsor activity.”
Commentary: “McCormick sources ingredients from over 85 countries and the company expects a $140mm annualized gross impact from tariffs (relative to gross profit of about $2.8B in 2026). Looking ahead, MKC expects to offset as much of the incremental tariff impact as it can with productivity savings, alternative sourcing and supply chain initiatives.”
Commentary: “Bears have argued that earnings beats are a result of over-earning against long term average margins but bears have been making this argument for over 18M and yet revisions have remained strongly positive.”
Commentary: “REG ranks #1 in our BofA proprietary shopping center ranking analysis among publicly listed shopping center REITs within our coverage. This score is based on demographics and exposure to the #1 grocer in a market. We also favor REG for its roughly $300M ground-up development pipeline in top markets given there is limited new retail development in the US.”
Commentary: “It operates across river, ocean, and expedition segments, with a dominant > 50% market share in the river cruise category. Its differentiated, all-inclusive, destination focused product continues to set it apart from peers, driving superior financial performance.”
Commentary: “Cancelled flights in November and the potential that Disney Experiences trips will be affected, presenting some risk to the December quarter. Still, many of these trips will be postponed rather than cancelled and Congress has recently made progress on ending the shutdown.”
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