BofA Securities' Savita Subramanian says there’s opportunity in this corner of the market that isn’t getting attention

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The firm's head of U.S. equity and quantitative strategy favors what she calls 'old school capex' stocks that have yet to price in any AI gains.

Bank of America's Savita Subramanian said investors are neglecting this one corner of the market with upside potential: "Old school capex." Investors are navigating what appears to be an increasingly challenging market. On Friday, the S & P 500 posted its worst week since April as investors rotated into small cap stocks from big cap tech on hopes of an improving interest rate and inflation outlook. Subramanian anticipates stocks can still go higher from here, on balance.

"So, I think from here it broadens out, but what worries me is if big cap tech doesn't hold up from here, we might not see as strong of gains in the overall benchmark," Subramanian added. Instead of big cap tech, the strategist favors what she calls "old school capex" stocks that have yet to price in any gains from artificial intelligence, as well as from the nearshoring trend.

 

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