Bank of America believes the recent sell-off in AI infrastructure stocks has gone far enough to justify fresh buying positions across the sector.
The bank’s research team published a note on Wednesday screening its trading desk’s AI ecosystem baskets and identifying 16 Buy-rated stocks worth revisiting.
The methodology focused on names that had fallen sharply from their highs while analysts were simultaneously raising earnings estimates on them.
BofA started with constituents across its 15-plus AI ecosystem baskets, removed anything not rated Buy, and kept only stocks with positive three-month earnings revisions trading more than 20% below their 52-week high.
Forty-six names initially cleared that screening bar before analysts narrowed the final list down to 16 based on what they saw as the best risk-reward for a medium-term holding period.
The largest implied upside on the list belongs to Micron Technology Inc. (NASDAQ: MU), with BofA’s price objective of $1,550 against a closing price of $949.83, representing roughly 63% potential gain.
Analyst Vivek Arya wrote that investors have been positioning ahead of an eventual memory downturn, but called the reset “an enhanced buying opportunity” on the view that the stock already discounts a severe cyclical outcome.
Arya argued the current valuation assigns almost no value to Micron’s high-bandwidth memory and broader AI business, which he sees as a significant mispricing by the market.
He expects server DRAM pricing to rise 13 to 18% quarter-over-quarter in the third quarter, with supply staying tight because new capacity only starts arriving around mid-2027.
Arya’s long-term estimate sits at roughly $150 in per-share earnings for 2028, providing a substantial fundamental anchor for his bullish thesis on the stock.
At the opposite end of the list sits Atlassian Corp. (NASDAQ: TEAM), which carries just 5% implied upside and is the only name on the list already trading near BofA’s price objective.
The contrast between Micron and Atlassian illustrates the wide range of situations BofA analysts identified across the 16-stock list.
All prices referenced in the BofA note are based on closing levels from August 13, giving investors a clear baseline for measuring potential returns.
The broader thesis from Bank of America reflects a growing view that AI infrastructure valuations have been punished beyond what fundamentals warrant.
With earnings revisions trending positive even as share prices have slumped, the bank sees a disconnect that active investors may want to exploit over the medium term.
