Bank of America recommends rotating into undervalued sectors as artificial intelligence productivity gains disappoint investors.
Bank of America Securities advises investors to reduce exposure to overcrowded artificial intelligence trades, citing lagging productivity gains. The firm highlights value stocks, biotech, regional banks, select credit, and commodities as attractive alternatives in an inflationary environment.
The recommendation follows concerns that traditional portfolios may underperform as inflation risks persist. Prior reports had emphasized growth sectors, but the latest shift reflects a broader reassessment of market opportunities.
No immediate market reaction was detailed in the report, though the call may influence sector rotation strategies among institutional investors.