According to Bank of America, the stock market is full of undervalued companies that investors should pay attention to. Hyperscalar tech companies and other high-flying stocks tied to artificial intelligence are driving the U.S. stock market to record highs this year. But AI trading has been volatile in recent weeks as some in the market have begun to question the soaring valuations of AI stocks, the ultimate return on hyperscalers’ high capital expenditures, and the downside of a market so concentrated in technology. The top five companies in the S&P 500 are all tech giants, accounting for about 30% of the broader market index. To find opportunities outside of AI trading, Bank of America looked for S&P 500 stocks that were rated Buy across the spectrum that weren’t included in AI, power, or infrastructure ETFs. Of these, the firm classified stocks that were trading below a market multiple of 26x and at least 10% below their 52-week high. This search resulted in more than 80 names, and BofA analysts ultimately narrowed the list of stocks to 16 for clients. Although some stocks are indirectly exposed to AI, they do not trade like stocks directly exposed to AI, the firm said. “The market is so focused on owning companies that will benefit from AI investments, from semiconductors to power plants to hyperscalers to certain capital goods names, that it may be missing out on other opportunities,” Thomas Thornton, Bank of America’s head of global research product marketing, said in a note to clients on Tuesday. “We thought it would be useful to focus on companies that are not generally thought of as direct beneficiaries of AI, but that our analysts find attractive.” Take a look at some of the stocks the firm recommends below. Bank of America highlighted packaging company Amcor as an undervalued company with upside potential. Analyst George Stafos, who covers Amkor stock, has a buy rating on the stock, saying it is “supported by several strategic initiatives and improvement potential following the recent acquisition of Berry Global, as well as an attractive valuation,” the note said. Stafos said he sees multiple opportunities for expansion as the stock’s fundamentals improve, with Amcor’s stock trading at a 2026 price-to-earnings ratio below the group average, according to his estimates. Amcor’s stock price has fallen nearly 10% since the beginning of the year. Amcor’s stock rose more than 7% this month, driven by strong demand for its containers, after Amcor beat first-quarter profit estimates on Wednesday, according to FactSet. Freeport-McMoRan, another stock under BofA’s review, is trading 19% below its 52-week high. BofA analyst Lawson Winder recently upgraded the stock to buy after selling off on news of the accident at the company’s Grasberg Block Cave mine in Indonesia. Currently, the company is encouraged by the fact that Grasberg, which accounts for 50% of the company’s reserves, is scheduled to restart later this year. Winder is also bullish on the potential for copper prices to rise going forward, given supply challenges and demand growth. Freeport-McMoRan stock is up about 8% since the beginning of the year. Other than AI, BofA’s favorite stocks include AT&T, Walt Disney Co., and insurance giant Progressive. Progressive’s stock price, in particular, is down 26% from its 52-week high, making the tattered stock cheap for investors. BofA is bullish on continued growth in progressive contract volume, although it expects interest rates to be slower than in the past. The company noted that stock price estimate revisions are also some of the strongest in the market. “Noting that no publicly traded U.S. large-cap stock has seen as large a positive EPS revision as Progressive over the past two years, he estimates that consensus EPS estimates are still significantly too low, whether for Q4 2025 or 2027,” the memo said.
