There are currently doubts about the slowing pace of AI innovation in the market, but bank of america believes that the transformation of AI technology is actually accelerating, and the market focus has now shifted to the second stage of trade — software stocks and AI agency Agentic AI.

In a report on November 21, bank of america pointed out:

AI technology is rapidly developing, with new breakthroughs occurring almost daily. The scope of AI capabilities is wide, including completing software engineering tasks, providing customer service, booking travel, and even being used in precision surgeries or vehicle assembly. The wave of Agentic AI will catalyze the accelerated development and deployment of AI-driven applications, as well as industrial and commercial robots.

Bank of america further pointed out that with the widespread application of AI, the market focus has also shifted to the second stage of AI beneficiaries:

Do not underestimate the short-term disruptive potential of AI at this stage; the entire AI investment field, especially software stocks, is unlikely to be fully priced in by the market. As the software "AI moment" arrives, monetization of AI is expected to begin in 2025 and become significant in 2026 as enterprise adoption accelerates.

From knowledge workers to manual laborers, AI applications continue to expand.

Specifically, the bank of america pointed out that AI applications continue to thrive:

New and disruptive AI capabilities seem to emerge at a speed of every week, or even every day. The pace of development of AI capabilities is so fast that AI agents may complete end-to-end software engineering tasks. We expect the latest wave of agentic AI to catalyze accelerated development and deployment of AI-driven applications, as well as industrial and commercial robots, which may change the global economy sooner than investors expect.

The bank of america stated that advancements in agent-based AI technology not only improve existing tools but also give rise to new applications.

What AI software currently demonstrates is only the tip of the iceberg of future possibilities. The models from OpenAI and Anthropic have recently shown doctoral-level capabilities, and the new model from Mistral excels in visual capability tasks. microsoft and Google have also launched new products with enhanced AI agent capabilities, with Google Gemini AI introducing memory functions for personalization, and Perplexity collaborating with Stripe to launch the Buy With Pro shopping platform, even the benchmarks used to evaluate model performance are improving.

The bank of america emphasizes that robots broaden the scope of AI applications:

Emerging robotic capabilities may have a disruptive impact in various fields such as warehousing, dining, and construction. Although the growth of global industrial robot installations has not yet accelerated, it is expected that by 2026, general-purpose robots will enter the market at a lower cost. Notably, china accounted for 51% of new installations and 41% of operational robots in 2023.

Regarding the impact on the labor market, the bank of america stated:

Advancements in AI technology may affect a broad range of professions, from knowledge workers to manual laborers. While it is unlikely that there will be large-scale AI-driven labor displacement in the short term, competition will become increasingly fierce with the proliferation of AI agents and robots. By 2030, agentic AI may fill a shortage of 10 million global healthcare workers.

Investors' focus has shifted to the second phase of AI.

Bank of America further pointed out that with the proliferation of AI applications, the market focus has also shifted to the second phase of AI beneficiaries:

Not only semiconductor companies and large cloud computing service providers, but S&P index companies are increasingly mentioning AI in their financial reports and meetings. As enterprise AI adoption increases in 2025 and accelerates in 2026, focus will shift in the coming year to the second phase of AI beneficiaries, especially software companies. Due to their layout in Agentic AI, Bank of America favors large companies such as microsoft, Salesforce, and adobe, while small and medium market cap companies like NICE, Informatica, and Zeta are also seen as potential target companies.

Bank of America listed three major development stages of AI beneficiaries:

Stage One: AI beneficiaries are expected to expand from nvidia to a broader semiconductor sector and cloud service providers (CSPs), including large cloud service providers as well as datacenter real estate investment trusts (reits) in the communications sector.

Stage Two: Beneficiaries may expand to software companies producing AI-driven applications, as well as technology hardware and capital goods companies that produce datacenter infrastructure, such as servers, networking devices, and electrical and air conditioning equipment.

Stage Three: Beneficiaries may expand to companies integrating AI products and services, such as dining and other consumer service companies, retailers, banks and financial service companies, media and entertainment companies, as well as biopharmaceutical and medical devices companies.

Editor/rice