BofA’s Subramanian Says Buy Cyclicals, Skip the Index

Industry
โดย 24/7 Wall St.·Read original
Summary · why it matters

Bank of America Securities’ head of US equity and quantitative strategy Savita Subramanian recommends investors ditch cap-weighted index funds and rotate into cyclical stocks, arguing that corporate earnings are surging while cyclicals remain cheap. She noted that S&P 500 earnings growth is tracking around 20% this year, well above the initial 15% consensus, and that total US corporate profits hit $4.4 trillion in the first quarter of 2026, up 12.8% year over year. Subramanian favors industrials, energy, and materials, highlighting names like Caterpillar, which saw revenue climb 22.2% to $17.41 billion, Applied Materials, which guided calendar 2026 equipment growth above 30%, and Barrick Mining, which posted record operating cash flow of $2.73 billion and hiked its dividend 40% despite its stock falling 14.6% year to date. She cautioned that hot nominal GDP could keep the Federal Reserve tighter for longer, but believes cyclical earnings growth can outpace the pressure on valuations.

Impact on stocks 7

Energy Transition & Power Demand▲ · 3 stocks
Caterpillar Inc
CAT
▲ PositiveDemandrelevance

Caterpillar saw revenue climb 22.2% to $17.41 billion, reflecting strong demand for its products.

Semiconductors▲ · 1 stocks
Applied Materials Inc
AMAT
▲ PositiveDemandrelevance

Applied Materials guided calendar 2026 equipment growth above 30%, indicating strong end-customer demand.

Critical Materials & Supply Chain▲ · 1 stocks
Barrick Mining Corporation
B
▲ PositiveCapitalrelevance

Barrick Mining posted record operating cash flow and hiked its dividend 40%, a positive financial event.

Financials▲ · 1 stocks
Artificial Intelligence▲ · 1 stocks
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