Bank of America has identified a fresh set of technology stocks that it believes are well-positioned heading into the second half of the year, with artificial intelligence and enterprise software trends expected to remain key drivers of performance.
The brokerage named chip giant Nvidia, social media company Meta Platforms, cloud software provider Snowflake, observability platform Dynatrace and memory-storage company SanDisk among its top ideas.
Bank of America argued that each offers attractive upside potential despite mixed share-price performances so far this year.
The stocks were screened by CNBC Pro and rated buy at Bank of America.
AI remains the common theme
The firm’s recommendations come as investors continue to rotate into companies viewed as direct or indirect beneficiaries of the artificial intelligence boom.
For Nvidia, Bank of America reiterated its positive stance and maintained a $350 price target.
Our $350 PO is based on 26x CY27E PE ex cash, within NVDA’s historical 25x-56x forward year PE range, which we believe is justified by NVDA’s leading share in fast-growing AI compute/networking markets, offset by lumpiness in global AI projects, cyclical gaming market, and concerns around access to power.
Bank of America
Nvidia has emerged as one of the biggest winners of the AI investment cycle, with demand for its processors continuing to outpace supply as technology companies pour billions of dollars into AI infrastructure and data centers.
Snowflake and Dynatrace seen benefiting from enterprise AI
Bank of America also highlighted software companies that are increasingly embedding AI capabilities into their products.
The brokerage maintained its buy rating on Snowflake, saying the company possesses several competitive advantages, including its first-mover status in cloud data warehousing, interoperability across major cloud providers and growing traction in AI software.
We rate SNOW Buy. Snowflake possesses compelling competitive advantages, including 1) data warehouse first mover in the cloud, 2) native interoperability with the major public clouds, 3) ability to run multiple workloads, such as data warehouse, data engineering/data science and data sharing, 4) large installed base of enterprise customers and 5) traction in the AI Software market.
Bank of America
Meanwhile, analyst Koji Ikeda called Dynatrace a “great” idea for the second half and raised his price target to $50 from $48 following discussions with management.
“We are more convinced its value proposition will land more strategic deals and higher usage, driving strong growth in its key metric: net-new annual recurring revenue (ARR) in constant currency,” Ikeda said.
He added that AI is making it increasingly difficult for enterprises to deliver secure digital experiences efficiently and that Dynatrace is uniquely positioned to address those challenges.
“We believe Dynatrace is poised for multiple years of high growth in a large and expanding market.”
Dynatrace shares have fallen about 4% this year.
Meta’s AI search opportunity
Bank of America also remains bullish on Meta Platforms despite the stock’s 13% decline this year.
It recommends buying the dip.
Analyst Justin Post said the rollout of Meta’s new AI search feature could create a significant opportunity if the company succeeds in driving user adoption.
“AI technology has opened the door for better ‘indexing’ of content for search results, possibly creating an opportunity for Meta. … The ‘search’ opportunity remains large for Meta, if the company can drive product adoption.”
Post also pointed to a series of upcoming catalysts, including the launch of consumer agentic products, more advanced large language models, the company’s Connect conference in September and additional details regarding its enterprise AI strategy.
SanDisk’s pricing power attracts attention
Bank of America also reiterated its buy rating on SanDisk after management discussions reinforced confidence in the company’s shift toward multiyear supply agreements.
Investor discussions focused on the company’s new business models, which are designed to reduce revenue cyclicality and provide greater financial visibility.
We see the NBMs as win-win as they lock in committed supply for customers, and committed financials for Sandisk.
Bank of America
The brokerage recently raised its price target on Sandisk to $2,100 from $1,550.
“Reiterate Buy on valuation, beneficial joint venture partnership, share gains, and long-term potential for industry consolidation.”
SanDisk shares have climbed more than 820% this year, making it one of the strongest performers among technology stocks.
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