Bank of America has highlighted five stocks it sees as having upside potential during periods of market uncertainty, but only two have outperformed the S&P 500 so far this year. After a recent sell-off, investors have been looking beyond AI-related trades; the stocks’ mixed performance underscores that defensive picks are not necessarily insulated from declines.
On November 5, concerns about artificial intelligence helped trigger a sharp drop in U.S. stocks, wiping out about $2 trillion in market value during the first hour of trading. Investors were concerned that a Congress controlled by Democrats could slow construction of AI data centers. The sell-off prompted renewed interest in reducing risk and finding alternatives to AI-focused investments.
Madison Square Garden Entertainment and U.S. Bancorp beat the index
Madison Square Garden Entertainment (MSGE) has been the strongest performer on the list, with its shares up nearly 48% this year. Major concerts, including shows by Harry Styles, have supported the company’s performance. Bank of America also expects its Christmas Spectacular season to provide a further boost, citing more scheduled performances and stronger advance ticket sales.
U.S. Bancorp (USB) has gained nearly 18% year to date. Bank of America sees room for earnings growth as the bank reprices existing assets and expands fee income. That outlook, however, depends in part on the broader economy remaining stable.
The S&P 500 is up 10.5% this year. By that measure, MSGE and USB are the only stocks on Bank of America’s list to have outperformed the benchmark.
AT&T, L3Harris and Krispy Kreme remain down for the year
The other three stocks on the list—AT&T, L3Harris and Krispy Kreme—are all below their levels at the start of 2026. Their declines contrast with a gain of more than 10% for the U.S. stock market overall, showing that shares described as steadier or offering upside potential can still lag the index.
Bank of America’s five picks give investors alternatives to the AI trade to consider, but their returns so far do not point to a consistent defensive effect. The market backdrop, company-specific catalysts and economic conditions remain important factors in how each stock performs.