With the second half kicking off, Bank of America is noting its top long picks along with one short for the third quarter. In the first half of the year, the mania for all things tied to artificial intelligence bolstered the performance of stocks such as Nvidia and drove up the S & P 500 by nearly 15%. The Nasdaq Composite also saw first-half gains, rallying 18.
1%. The Dow Jones Industrial Average underperformed, however, moving 3.8% higher due to a pullback in the second quarter.
Here are some of Bank of America's top individual stock picks entering the back half of the year: In the aftermath of layoffs and restructuring at Spotify in 2023, BofA now sees business conditions turning around. Spotify has several instruments to boost free cash flow, analyst Jessica Reif Ehrlich wrote. Among those catalysts are recent price increases, sustained subscriber growth and a podcast-driven improvement in advertising, she wrote.
"The company clearly is at an inflection point which is driving share price performance over the past year and a half," Reif Ehrlich wrote. Shares of Spotify are ahead 68% in 2024 and 224% in the past two years. On Tuesday, BofA increased its price target on the stock, calling for 21% upside.
The bank sees second quarter revenue coming in above Spotify's previous guidance, and other yardsticks such as premium subscribers at least matching company forecasts. Bank of America is also bullish on Goldman Sachs , seeing it as a way to gain exposure not only to a cyclic.