Bank of America names 3 ETFs and a handful of stocks that will benefit from AI
Bank of America has identified several stocks and exchange-traded funds (ETFs) poised to benefit from the growth in artificial intelligence. The Wall Street bank surveyed its fundamental equity team of 130 analysts, covering approximately 3,400 companies, to identify the companies that stand to gain from AI across various sectors. The bank believes the development of AI is the third major tech cycle over the past five decades. The earlier cycles are the growth of the internet and mobile phone devices. “Despite AI capital expenditure potentially reaching [$1 trillion plus] in the near term, we’re only in 1996 relative to the internet,” said Bank of America analysts led by Alkesh Shah, who compiled the stock picks, on Aug 5. “GenAI apps and the foundation models that power them have advanced rapidly in just the past 18 months, but over the next 5-10 years, we expect GenAI to transform the global economy, as well as our lives,” he said. Their research highlighted three ETFs offering exposure to the AI theme that are readily accessible to investors: The analysts suggest that although AI-powered chatbots, writing, research, and coding apps have captured user interest, the long-term — and more profitable — use case will likely appear when large corporations embed AI systems into their processes. “Enterprise AI strategies are more complex than typing questions into ChatGPT, but we expect accelerating adoption in 2025 as pilots move to production for the 44% of S & P companies that mentioned “AI” during 2Q24 earnings,” the BofA analysts added. The table below lists European and Asian stocks BofA analysts have picked, all of which also trade in the U.S. European stocks include Budweiser brewer Anheuser-Busch InBev , chip stocks ASM International and ASML , telecom firm Orange , British analytics company Relx , and German business software developer SAP. — CNBC’s Michael Bloom contributed reporting.
