Bank of America Advises Traders on Profitable Investment Strategies from Large Cap to Small Cap with Smart Defense

Bank of America has advised investors to consider a new trend called artificial intelligence (AI) in their investment strategy. The bank’s Head of US Equity and Quantitative Strategy, Savita Subramanian, wrote in a recent note to clients that the new bull case for stocks is productivity, and that AI spend will likely occur within a broader capex cycle on automation, reshoring, and green initiatives. She also noted that companies that are more exposed to capital spending will benefit, while defensive names and longer-duration stocks may be less desirable. Subramanian and her team upgraded their view of the tech sector to Market weight from Underweight due to their positioning risk being lower than it’s been in a long time and their finances and margins being generally healthy. They downgraded healthcare and communication service stocks to Underweight from Market weight, while consumer staples stocks were lowered to Market weight from Overweight. The bank’s strategists, Jill Carey Hall and Nicolas Woods, also advised investors to invest along value lines within mid-cap and small-cap stocks.