Bank of America’s Stock Picks for 2026: Amazon, Boeing Make the Cut

TLDR

• Bank of America released top 10 stock picks for Q1 2026 with nine Buy ratings and one Underperform across nine industries
• Buy-rated stocks include Amazon, Boeing, Cigna, Constellation Energy, Dollar General, Equinix, Merck, Spotify, and Vertex Pharmaceuticals
• Lennar Corp received the sole Underperform rating despite recent homebuilding sector strength
• AI remains a theme through Amazon, Constellation Energy, and Equinix, but Q1 catalysts are diverse including healthcare legislation and tax refunds
• Bank of America warns S&P 500 valuations are expensive but sees opportunities in Health Care, IT, and Real Estate sectors

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Bank of America released its top 10 stock recommendations for the first quarter of 2026 on January 2, featuring picks across nine different industries. The list includes nine Buy ratings and one Underperform rating.

The Buy-rated stocks are Amazon.com, Boeing, Cigna, Constellation Energy, Dollar General, Equinix, Merck, Spotify, and Vertex Pharmaceuticals. Lennar Corp received the sole Underperform rating on the list.

Strategist Anthony Cassamassino explained the list focuses on companies that could see major market and business-related catalysts in the quarter ahead. The selections span multiple sectors rather than concentrating on a single investment theme.

AI Infrastructure and Diverse Catalysts

Artificial intelligence remains a factor in some selections. Amazon, Constellation Energy, and Equinix all offer exposure to AI-related infrastructure investments.

Amazon.com, Inc., AMZN

However, Bank of America noted the drivers for the broader list are more diverse this quarter. Different companies face unique catalysts specific to their industries and business situations.

For Cigna, the bank expects potential upside from upcoming healthcare legislation. Boeing’s stock performance will likely depend on commercial production rates, which remain a key factor for confidence in the company’s recovery.

Dollar General could benefit from higher-than-expected tax refunds in early 2026. Tax refunds typically boost consumer spending at value retailers during the first quarter.

Dollar General delivered an 80% return over the past year according to InvestingPro data. The company maintains liquid assets that exceed short-term obligations.

Dollar General is trading below its fair value currently. The retailer is scheduled to report earnings on March 12, 2026.

Recent Dollar General Performance

The company reported third-quarter sales of $10.65 billion, meeting analyst expectations. This represented 2.5% growth in comparable sales for the quarter.

Earnings per share reached $1.28, beating Truist Securities’ estimate of $0.96. Multiple analysts raised their price targets following the strong earnings report.

UBS increased its price target to $143 citing traffic growth and margin recovery. Guggenheim raised its target to $140 based on gross margin improvements.

JPMorgan upgraded Dollar General to Overweight with a $166 price target. The upgrade was based on anticipated same-store sales growth supported by store expansion and renovation plans.

Market Valuation Concerns

U.S. Equity Strategist Savita Subramanian warned that the S&P 500 is expensive. Valuations remain stretched even after a strong performance in 2025.

The bank expects a more challenging environment for passive index exposure going forward. However, Subramanian noted opportunities still exist in specific sectors.

Health Care, IT, and Real Estate sectors look particularly attractive in the near term according to Bank of America’s analysis. The firm suggests there is always a bull market somewhere despite broader market concerns.

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