Buying the Dip: BofA Highlights 16 AI Stocks That Have Slumped

According to Investopedia, Bank of America analysts believe the recent correction in AI-related stocks has created opportunities for investors seeking undervalued equities.

In a recent report, analysts highlighted 16 companies. Despite upward revisions in their earnings forecasts, these stocks have declined more than 20% from their 52-week highs, leading analysts to view them as having "attractive medium-term upside potential."

Analysts noted that while AI spending by major U.S. tech giants is expected to peak this year, the growth rates of the companies on this list are "projected to remain strong through 2027."

There are recent signs that market sentiment is beginning to shift back toward AI. Chip stocks briefly approached entering a new bull market on Thursday, but retreated on Friday amid broad market declines.

The stocks selected by BofA include memory chip leader Micron Technology (MU-US), semiconductor equipment manufacturer Lam Research (LRCX-US), and hard drive maker Seagate Technology (STX-US). Although all three have pulled back from recent highs, they remain among the best-performing stocks in the S&P 500 year-to-date.

Meta (META-US) is also on the list. BofA stated that the market is underestimating the social media giant's "ability to convert growing compute assets into revenue" and its potential for continued advertising revenue growth. Meta is reportedly in talks with Anthropic to lease additional AI computing power. Meta's stock has declined about 10% this year and is down roughly a quarter from its peak in August last year.

Data center operator CoreWeave (CRWV-US), database giant Oracle (ORCL-US), and Celestica (CLS-US), which provides data center supply chain solutions, are also included.

Additionally, the list features thermal and power management company Vertiv (VRT-US), power provider Talen Energy (TLN-US), and nuclear power company Vistra (VST-US).

Albemarle (ALB-US), the world's largest lithium producer, is also highlighted by BofA. Lithium is a critical metal for data center battery production. Uranium supplier Cameco (CCJ-US) is also on the list.

Electronics manufacturer Flex (FLEX-US), enterprise software company Atlassian (TEAM-US), brokerage platform Robinhood (HOOD-US), and Aktis Oncology (AKTS-US), backed by Eli Lilly (LLY-US), are also named in this report.