Wall Street’s latest selloff has investors looking for somewhere safer to put their money. Bank of America sees potential in five stocks.
Yet three have fallen this year, while the broader US market has gained more than 10%.
The search for safer investments gained urgency on November 5, when an AI-led market crash erased roughly $2 trillion from US stocks in the first hour.
Investors feared the newly Democratic-controlled Congress could slow AI data center development.
Bank of America’s picks offer alternatives to the AI trade. So far, only two have outperformed the S&P 500.
Two Stocks Remain Largely Bullish
Madison Square Garden Entertainment (MSGE) is the standout. Shares have jumped nearly 48% this year, helped by major concerts, including Harry Styles performances. Bank of America expects its Christmas Spectacular to provide another boost, with more shows and stronger advance ticket sales.
U.S. Bancorp (USB) has risen nearly 18%. The bank sees room for earnings growth as older assets are repriced and fee income expands. Its turnaround still depends on the wider economy holding up.
The other three picks face a tougher test.
Three Stocks are Still Waiting For a Recovery
AT&T (T) is down more than 6%, despite remaining Bank of America’s top US telecom pick. Analysts point to improving cash flow, its dividend and a $34 price target. The shares have yet to reflect that optimism.
L3Harris (LHX) has fallen about 7%. Bank of America likes the new CEO’s focus on better execution and overseas sales. However, the company faces fresh scrutiny over its possible role in Friday’s nationwide US flight stoppage.
Krispy Kreme (DNUT) has lost roughly 2.5%, despite a recent rebound. Analyst Sara Senatore said maintaining earnings guidance despite rising costs was:
“The clearest evidence yet that the turnaround savings are durable.”
The five stocks show the challenge of finding safety during market turmoil. Madison Square Garden has already delivered a substantial rally. The three laggards still need to prove their recovery plans can translate into stronger share prices.
For investors, a Buy rating offers no guarantee against another selloff.
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