Overview
Bank of America (BofA) this week highlighted that the next wave of artificial‑intelligence (AI) winners may emerge outside the heavily‑crowded semiconductor and mega‑cap space, pointing to firms in the energy and materials sectors that supply AI‑related capacity.
Market Context
The AI trade has driven a vigorous rally this year, helping Wall Street shake off the Middle‑East conflict and push equity markets to record levels. However, since last month investors have been profit‑taking amid concerns that valuations are stretched and that the AI rally may have risen too quickly.
Semiconductor Performance
Chipmakers and semiconductor‑equipment providers have posted some of the strongest gains. The Philadelphia Semiconductor Index, a key barometer for chip stocks, recorded an 18‑day winning streak earlier in the year and is up 64.8% year‑to‑date (YTD) in 2026.
Earnings Revisions Outside Tech
BofA noted that many of the largest positive earnings revisions have come from non‑technology companies—specifically AI‑capacity suppliers that remain “largely untouched.” These firms sit in the energy and materials sectors. Over the last three months, long‑only managers have underweighted energy by 31% and materials by 6%.
Inflation and Yield Environment
The brokerage added that with potentially sticky inflation and real cash yields still negative, companies that pass BofA’s screen for inflation‑protected income are largely unloved and inexpensive.
Valuation Gap with Direct Beneficiaries
Direct beneficiaries such as semiconductor and tech‑hardware stocks have already experienced high price appreciation, up +69% and +65% YTD respectively in the S&P 500, leading to pricier multiples since 2022.
Less‑Crowded AI Opportunities
Industries that exhibit quieter AI‑related gains—such as workflow‑automation providers, firms with faster product cycles, and those with lower back‑office intensity—are described as less crowded and potentially poised for outperformance.
Conclusion
BofA’s thematic view suggests investors should look beyond the traditional AI‑heavy semiconductor and mega‑cap names toward energy and materials companies supplying AI capacity, as well as niche AI‑enabled business services that have not yet seen large price inflations.