Wall Street’s recent selloff has pushed investors to seek safer havens, and Bank of America has identified five stocks with potential. However, three of these picks have underperformed this year, while the broader US market has gained over 10%. The urgency for safer investments intensified on November 5, when an AI-driven market crash wiped out roughly $2 trillion in US stock value within the first hour. Concerns arose that a Democratic-controlled Congress might slow the development of AI data centers.
Bank of America’s selections offer alternatives to the dominant AI trade. So far, only two of the picks have outperformed the S&P 500. Madison Square Garden Entertainment (MSGE) stands out with a nearly 48% rise this year, boosted by major concerts and anticipated strong ticket sales for its Christmas Spectacular. U.S. Bancorp (USB) has climbed nearly 18%, with expectations of earnings growth driven by repriced assets and expanding fee income.
Three of the bank’s picks face a more challenging recovery. AT&T (T) has dropped over 6%, despite being Bank of America’s top telecom pick. Analysts highlight improving cash flow, its dividend, and a $34 price target, though these positives have yet to reflect in the stock price. L3Harris (LHX) has fallen about 7%, with scrutiny over its potential involvement in a nationwide US flight stoppage. Krispy Kreme (DNUT) has lost roughly 2.5%, but analyst Sara Senatore noted that maintaining earnings guidance despite rising costs signals durable turnaround savings.
The five stocks illustrate the difficulty of finding safe investments during market volatility. While Madison Square Garden has delivered a strong rally, the other three must prove their recovery plans can translate into higher share prices. A Buy rating does not guarantee protection against future selloffs.