Bank of America has identified several stocks and exchange-traded funds (ETFs) that are likely to benefit from the growth of artificial intelligence. The Wall Street bank surveyed its fundamental equity team of 130 analysts covering around 3,400 companies to identify the companies that could benefit from artificial intelligence across various sectors. The bank believes that the development of artificial intelligence is the third major technology cycle of the last five decades. The earlier cycles were the growth of the internet and mobile phones. “Although capital spending on artificial intelligence may reach over $1 trillion in the near future, we are only in 1996 compared to the internet,” Bank of America analysts led by Alkesh Shah, who put together the stock picks, said on August 5. “GenAI apps and the underlying models that power them have evolved rapidly over the past 18 months, but over the next 5 to 10 years, we expect GenAI to transform the global economy and our lives,” he said. Their research highlighted three ETFs that are easily accessible to investors and provide exposure to the AI topic: The analysts point out that while AI-powered chatbots, writing, research and coding apps have piqued user interest, the long-term – and more profitable – use case will likely come when large enterprises embed AI systems into their processes. “Enterprise AI strategies are more complex than typing questions into ChatGPT, but we expect accelerated adoption in 2025 as pilots move into production for the 44% of S&P companies that mentioned ‘AI’ during the second quarter 2024 earnings call,” the BofA analysts added. The table below lists European and Asian stocks selected by BofA analysts, all of which also trade in the U.S. European stocks include Budweiser brewer Anheuser-Busch InBev, chip stocks ASM International and ASML, telecoms company Orange, British analytics firm Relx and German enterprise software developer SAP. — CNBC’s Michael Bloom contributed reporting.
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