The Federal Reserve has fought for years to bring inflation back down toward its 2% long-term target. However, Consumer Price Index inflation recently hit its highest level since 2023 after the U.S. military action in Iran sent energy prices soaring. The Fed projects core inflation will continue to decline in 2026 and 2027, but many investors are skeptical.
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Inflation is bad news for Americans struggling to put food on the table, but rising prices are not necessarily bad news for every company. Here are seven stocks Bank of America analysts recommend that have historically had positive correlations with inflation:
| Stock | Implied upside |
| Freeport-McMoRan Inc. (ticker: FCX) | 22% |
| Applied Materials Inc. (AMAT) | 31% |
| Halliburton Co. (HAL) | 1% |
| Advanced Micro Devices Inc. (AMD) | 19% |
| Akamai Technologies Inc. (AKAM) | 16% |
| Western Digital Corp. (WDC) | 25% |
| Nucor Corp. (NUE) | 17% |
Freeport-McMoRan Inc. (FCX)
Freeport-McMoRan is the world’s largest publicly traded copper producer, and it’s also a major producer of gold and molybdenum. It makes sense that as the prices of copper, gold and molybdenum rise, so too do Freeport-McMoRan’s profits and revenue. Analyst Lawson Winder says Freeport-McMoRan is one of only a handful of relatively high-quality, large-cap copper stocks. Winder sees significant value in Freeport’s stock, even without factoring in potential upside from catalysts such as mill expansion in Bagdad, Arizona, and a new mill in El Abra, Chile. Bank of America has a “buy” rating and $74 price target for FCX stock, which closed at $60.50 on May 18.
Applied Materials Inc. (AMAT)
Applied Materials is the world’s leading producer of wafer fabrication equipment for the semiconductor industry. As a dominant supplier of critical semiconductor manufacturing equipment, Applied Materials has the type of pricing power that allows it to offset inflation by raising prices and passing higher costs on to its chipmaker customers. Analyst Vivek Arya says Applied Materials gained its leadership position because of its diversified product portfolio, its advanced technical capabilities, and its excellent support and customer service. Arya anticipates margin expansion and sustainable revenue growth ahead. Bank of America has a “buy” rating and $540 price target for AMAT stock, which closed at $413.57 on May 18.
Halliburton Co. (HAL)
Halliburton is a leading U.S. oilfield services company. Higher energy prices mean more drilling and higher demand for oil services technology. Analyst Saurabh Pant says Halliburton’s U.S. shale business will make the stock a winner in the long term. Pant says Halliburton’s spending on organic product lines and acquisition deals during the previous international oil market investment cycle has set the company up to outgrow the overall market. In addition, he says digital penetration and cost-cutting initiatives will allow for higher margins. Bank of America has a “buy” rating and $43 fair value estimate for HAL stock, which closed at $42.78 on May 18.
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Advanced Micro Devices Inc. (AMD)
Semiconductor company Advanced Micro Devices produces central and graphics processing units, and it has gained significant market share from leader Intel Corp. (INTC) in recent years in the data center chip market. Much like Applied Materials, AMD’s high-performance chips power artificial intelligence data centers, giving the company tremendous pricing power and the ability to pass higher costs along to customers. Arya projects AI data center infrastructure capital expenditures will reach around $1.7 trillion by 2030. Bank of America has a “buy” rating and $500 price target for AMD stock, which closed at $420.99 on May 18.
Akamai Technologies Inc. (AKAM)
Akamai Technologies provides content delivery network, or CDN, services and is also expanding its business into network security services. Because its critical cloud security and CDN services are non-discretionary, Akamai also has extreme pricing power without risking significant subscriber churn. Analyst Tal Liani says Akamai is a leader in the edge delivery network and distributed compute markets. Liani says the company is a credible AI infrastructure platform and has opportunities to leverage its existing enterprise customer base and expand to adjacent products and services over time. Bank of America has a “buy” rating and $175 price target for AKAM stock, which closed at $150.77 on May 18.
Western Digital Corp. (WDC)
Western Digital designs and manufactures storage solutions for data centers, mobile devices and personal computers. Because of the massive amount of data storage demand that is being created by AI technology, Western Digital also has significant pricing leverage that it can use to offset any rise in material costs. Analyst Wamsi Mohan says Western Digital will benefit from secular growth in the high-capacity/nearline hard disk drive market, a specialized segment of the industry focused on hard drives designed for cloud infrastructure and data centers. Bank of America has a “buy” rating and $572 price target for WDC stock, which closed at $458.68 on May 18.
Nucor Corp. (NUE)
Nucor is the largest U.S. mini-mill steelmaker and is one of the most diversified steel producers in North America. Nucor’s mini-mills rely on recycling scrap metal rather than expensive iron ore, so the company has a flexible cost structure that helps it maintain high margins as steel prices rise. Winder says Nucor has attractive exposure to long steel markets and should benefit from a near-term recovery in flat-rolled products. He projects strong volume growth in the medium term, supported by multiple projects that are already underway. Bank of America has a “buy” rating and $265 price target for NUE stock, which closed at $226.48 on May 18.
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7 Stocks That Are Good Inflation Investments originally appeared on usnews.com
Update 05/19/26: This story was published at an earlier date and has been updated with new information.
