BofA Says Buy These 16 Growth Stocks to Diversify Away From AI Trade

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If you’re starting to get a little uneasy about the AI trade, but still want exposure to stocks with explosive growth potential, Bank of America has a list for you.

AI stocks have been volatile this summer, with both hyperscalers and AI spending beneficiaries seeing large price swings. That’s led Bank of America’s clients to ask its researchers how they can keep their exposure to the growth theme while reducing their vulnerability to gyrations in the AI trade.

“Incoming requests suggest AI fatigue,” Savita Subramanian, the bank’s head of US equity and quantitative strategy, wrote in an August 21 client note, adding that “growth investors are looking for diversification away from pure AI.”

In response, the bank compiled a list of 16 stocks that offer investors the best of both worlds: high upside earnings potential and low correlation with price movements of firms like Nvidia, Alphabet, Microsoft, Meta, Oracle, and others.

More specifically, the stocks fall within the S&P 500’s consumer staples, healthcare, and financials sectors, which have generally not traded as AI plays yet. The stocks also have five-year projected earnings-per-share growth in the top quintile of the S&P 500 and are “Buy”- rated by the bank.

The 16 companies are listed below in descending order of their projected earnings growth.