2025-06-17T19:20:42Z
- Bank of America sees additional AI investment opportunities in small and medium-sized stocks.
- AI says it's on the rise in revenue calls, especially among the Russell 2000 companies.
- The bank shared four buy-rated AI stock picks above the grand Seven.
The grand Seven and AI trade have become synonymous, but there is an opportunity for investors to be exposed to AI megatrends outside the market's biggest names.
According to analysts at Bank of America, small businesses are using AI technology to drive revenue growth. As AI trade progresses, the next wave of beneficiaries is companies adopting AI in their product offerings and revenue models.
AI infrastructure companies like NVIDIA benefit from size and size, but more small companies are taking part in the next leg of AI trade.
Jill Carrie Hall, equity and qual strategist at Bank of America, wrote in a recent report that Russell 2000 companies' revenues have mentioned AI more frequently over the past few quarters.
According to the bank, software companies are particularly well positioned to exploit the emerging trends of agent AI or AI systems that operate autonomously with limited human supervision.
Senior Technology research analyst Bradsils reported an increase in indications of “green shoots” in the development of agent application adoption at the bank's Global Technology Conference earlier this month. Examples include increasing database activity to handle running AI applications and more AI-centric code.
Small businesses in particular offer AI opportunities for active inventory pickers. The overall category lags behind the larger counterparts, but the current background allows investors to buy promising high-growth companies at discounted prices. Additionally, Hall sees the possibility of mitigating inflation and picking up M&A transaction volumes to boost small technology evaluations.
Below are Bank of America's four top-by-rate small and medium AI picks, along with analyst comments related to 12-month price targets.
datadog
Market Insider
Seagate Technology
Market Insider
Kyndryl Holdings
Market Insider
jfrog
Market Insider
