Bank of America has expressed confidence in several stocks that are currently trading at fair value or even at a discount, anticipating positive performance in the first quarter of 2026. This optimism comes as the S&P 500 index shows signs of becoming more expensive, which the bank’s research note characterized as a significant concern. “There is no way to sugar coat it — the S&P 500 is expensive,” noted Savita Subramanian, the bank’s U.S. Equity Strategist. As a result, finding sound investment opportunities has become increasingly challenging this year.
Despite the overarching concern regarding valuation, Bank of America has identified ten stocks across nine industries, including retail, energy, and shipping, they believe could see growth in the upcoming quarter. Among these notable names are Amazon.com, Boeing, and Dollar General.
Amazon, widely recognized as an online retail giant, is expected to see substantial growth, particularly aided by its Amazon Web Services (AWS) segment. Analysts from Bank of America emphasize the company’s positioning in the rapidly evolving field of artificial intelligence. With efforts in quantum computing and custom silicon development on the horizon, Amazon is gearing up for significant advancements in emerging technologies. They project that revenue from AWS will accelerate, particularly as the company enters 2026 in a stronger operational position compared to 2025. Bank of America has assigned a buy rating to Amazon, setting a price target of $303; the stock has appreciated by 2.9% over the past year.
Dollar General is another stock highlighted by the bank, with analysts noting potential benefits from higher-than-expected tax refunds that may bolster its performance in the first quarter. The retailer’s ongoing initiatives to optimize operations and reduce inventory have demonstrated positive outcomes, thereby enhancing its profitability prospects. Bank of America also maintains a buy rating on Dollar General, projecting a price target of $160. The stock has surged over 80% in value in the past year, reflecting its robustness in the current market landscape.
Boeing, known for its aircraft manufacturing, has been included in Bank of America’s bullish outlook due to anticipated growth in its commercial production rates. The bank reports stabilization in Boeing’s production of commercial airplanes while noting improvements in its overall operational performance, following a challenging period that forced many airlines to reassess their orders. Bank of America believes that maintaining stable production levels is crucial for restoring investor confidence and gaining momentum for the upcoming year. The stock carries a buy rating and is targeted at $270 per share, having increased nearly 32% over the last year.
In summary, while the S&P 500 is exhibiting higher valuations, Bank of America’s identified stocks such as Amazon, Dollar General, and Boeing may be positioned to capitalize on favorable market conditions in early 2026.
