- Monday’s DeepSeek sell-off sent AI stocks tumbling.
- But some tech stocks with minimal AI exposure also saw their share prices drop.
- These four IT hardware companies are trading at bargain prices, according to Bank of America.
The stock market saw a lot of red on Monday. Maybe too much red, Bank of America argues.
Nvidia, most of Big Tech, and other AI-related trades — such as the energy, utilities, and data center stocks comprising the picks and shovels of the AI buildout — plummeted.
Non-AI trades were also caught in the crossfire as over a billion dollars evaporated from markets, perhaps as a result of investors falsely equating anything labeled “technology” with “AI,” or simply reducing positions in AI-exposed indexes like the Nasdaq. The tech-heavy index declined 3% on Monday.
Several IT hardware companies saw their share prices unfairly punished, providing a golden opportunity for investors to swoop in post-sell-off and snatch up these stocks at a bargain, according to a recent Bank of America note authored by Wamsi Mohan. Mohan, a senior technology analyst at the bank, is eyeing certain IT hardware stocks with “compelling growth drivers separate from Gen AI/data center spending.”
Overall, the IT industry has been trading at depressed levels due to customer pullback in spending. In recent years, many companies have cut back on their IT budgets over recession fears and concerns about rising interest rates, bringing stock valuations down.
An anticipated cyclical recovery, along with the recent sell-off, create a perfect opportunity to buy into hardware tech stocks, according to Mohan.
Listed below are four tech stocks that Bank of America believes will take off independently of AI, along with commentary from the firm. These names saw their stock prices tumble in excess of the 3% loss the Nasdaq posted on Monday, making now a good time to invest at an attractive entry point, Mohan said.