Wall Street is crazy about AI, BofA quietly follows Buffett's land

The stock market is in turmoil. “AI fever” continues to attract millions of new investors, fueling fears of a growing bubble. Many stocks skyrocket one week only to plummet the next. Volatility has become a familiar backdrop on Wall Street.

In times of extreme market greed, experienced investors often look for an anchor. And no one is more suitable than the "Oracle of Omaha" - Warren Buffett.

His investment philosophy, honed over decades at Berkshire Hathaway, is to turn fear into patience. His classic quote is always a guiding principle: “Be fearful when others are greedy and greedy when others are fearful.”

It sounds simple. But putting it into practice in a market that's drunk on tech parties is another story entirely.

That’s why a subtle, almost silent, change from Bank of America (BofA) is drawing special attention from the financial world. The second-largest bank in the US didn’t hold a big press conference or directly mention Warren Buffett. But their tone has changed, and it’s unmistakably Buffett-esque.

Cả phố Wall say sưa với AI, BofA âm thầm theo vùng đất của Buffett - 1 — Warren Buffett - investment legend with philosophy: "Be fearful when others are greedy and greedy when others are fearful" (Photo: Shutterstock).

Turning point in valuable land

In the report "Small/Mid Cap Factors", BofA experts made a recommendation that goes against the market trend, that it is time for investors to shift their focus to value stocks, instead of chasing hot stocks thanks to the "AI fever".

Value stocks are the stocks of good companies with solid business foundations that are currently undervalued by the market. These are the "forgotten gems" that Warren Buffett has spent his entire career searching for and reaping great success with.

Bank of America's argument is based on sharp data analysis. "Our US Regime Indicator has recently moved into recovery mode," the report said. "Historically, this is the period when small-cap value stocks have been the most consistent leaders."

Not stopping there, BofA added that mid-cap value stocks have also started to outperform, even as growth stocks continue to rally.

The bank believes that the recent rally in small caps has not been driven by high-quality stocks, but has been driven mainly by weak stocks. This recovery, they say, may be running out of steam.

This is Buffett's familiar "territory", which is choosing sustainable businesses at reasonable prices, while the crowd is busy chasing trendy but risky names.

The Shadow of the "Sage" at Bank of America

The strategic similarities are no coincidence. Warren Buffett, through Berkshire Hathaway, is one of Bank of America’s largest shareholders, with a stake that at one point exceeded 10%. This deep connection makes BofA’s move all the more remarkable.

However, one interesting detail is that in recent quarters, Berkshire has slightly reduced its stake in the bank. That move has raised speculation: is Buffett reassessing his faith in BofA, or is this simply a routine portfolio rebalancing?

Whatever the answer, BofA’s “contrarian” strategy is a bold move. At a time when markets are driven by expectations of an early Federal Reserve rate cut—a factor that typically favors tech growth stocks—BofA is betting on a return to fundamentals.

Ironically, a recent BofA survey also found that many fund managers are concerned about an “AI bubble” forming, further reinforcing why the bank decided to go the safer, more sustainable route.

Lessons for investors

Bank of America’s move could be seen as a subtle warning amid the speculative frenzy, suggesting that even the biggest financial institutions are preparing for a scenario where core values and solid business fundamentals replace fads.

For individual investors, this is an important indicator. Instead of getting caught up in the fear of missing out (FOMO) of skyrocketing tech stocks, this might be a time to look at your portfolio and ask yourself: Am I investing or speculating? Am I buying a piece of a great business at a fair price, or am I just buying a stock in the hope of selling it to someone else at a higher price?

Markets will always fluctuate, but Warren Buffett's value investing philosophy has proven effective over decades. The fact that Bank of America, a Wall Street giant, is quietly following this path is proof that classic wisdom never gets old.

Source: https://dantri.com.vn/kinh-doanh/ca-pho-wall-say-sua-voi-ai-bofa-am-tham-theo-vung-dat-cua-buffett-20251019094010634.htm