Bank of America identifies AI-boosted stocks and ETFs

Bank of America has released a report identifying key stocks and exchange-traded funds (ETFs) that are expected to thrive amid the burgeoning artificial intelligence (AI) sector. The bank's fundamental equity team, comprising 130 analysts who cover around 3,400 companies, conducted a comprehensive survey to pinpoint firms likely to gain from AI advancements across various industries. The analysts view the rise of AI as the third significant technological cycle in the last fifty years, following the internet and mobile technology. According to Bank of America, AI capital expenditure could exceed $1 trillion in the near future, likening the current stage of AI development to the internet's landscape in 1996. Alkesh Shah, who led the analysis, emphasized the rapid evolution of generative AI applications over the past 18 months and projected that these technologies will fundamentally reshape the global economy and daily life over the next five to ten years. The report also highlights three ETFs that provide investors with accessible exposure to the AI theme. While AI-powered applications like chatbots and coding tools have garnered significant attention, the analysts believe that the most lucrative applications will emerge when large corporations integrate AI into their operational frameworks. They anticipate a surge in enterprise AI adoption by 2025, particularly as 44% of S&P companies referenced AI in their second-quarter earnings reports. Additionally, the report lists several European and Asian stocks that are also traded in the U.S., including Anheuser-Busch InBev, ASM International, ASML, Orange, Relx, and SAP, indicating a broad international interest in AI-related investments.