Stocks for a 'world after Covid,' according to Bank of America

Published Tue, May 5 20206:52 AM EDT

Jesse Pound @/in/jesse-pound @jesserpound

(This story is for CNBC Pro subscribers only ). The coronavirus pandemic "will completely reshape geopolitics, societies, and markets," Bank of America said in a new note to clients. The bank identified five themes that will change the business world after the crisis, and picked stocks that were good bets to take advantage of the shifts. One of the major themes is the increased need for data and a "tech war," with half of Bank of America's analysts predicting that spending on information technology will increase after Covid-19. In the bank's view, that could take the form of more permanent work from home arrangements and also spending on longer-term projects like artificial intelligence being pulled forward. "We anticipate a wave of investment in new infrastructure, AI technologies and moonshot future tech," the note said. In an accompanying note, Bank of America identified the stocks best positioned for these changes on a primer list. In order to be included on the primer list, the stocks need to have a buy rating from the bank and have "medium" or "high" exposure to the changes identified by the themes. Two of the tech stocks that fit that criteria are cybersecurity firm Fortinet and software giant Salesforce . Both stocks have outperformed the broader market so far this down, falling less than 2%. Another sector that will change is health care, where an increased focus on the benefits of strong public health could make health care companies a key component of ESG investing and spark a surge in government spending, according to the bnak. "Public health is the new national wealth. Stakeholders will increasingly focus on health-related ESG metrics; governments will come to appreciate health more as an economic resource," the note said. Health spending and investment should remain elevated even as the crisis recedes, and life sciences company Thermo Fisher and and biotech firm Intuitive Surgical are smart plays for investors looking to take advantage of that, the bank said. Intuitive Surgical, which sells robotic surgery equipment, is still trading about 19% below its highs in late February, before the coronavirus sell off hit. The extra friction between the United States and China will also accelerate the shift to more domestic supply chains, according to the note. That relationship has come under even more scrutiny recently as U.S. leaders, including President Donald Trump and Sec. of State Mike Pompeo, have upped their saber rattling toward China in recent weeks. If investors are looking to bet on domestic production, U.S.-based manufacturers Eaton and Emerson both make the bank's primer list. The other themes identified by the bank are the consumer habits that may stick around after the isolation periods end and a bigger government with more surveillance powers.

A man wearing a protective mask sits on top of the Charging Bull sculpture near Wall St. amid the coronavirus pandemic on April 19, 2020 in New York City, United States.

Alexi Rosenfeld | Getty Images

(This story is for CNBC Pro subscribers only).

The coronavirus pandemic "will completely reshape geopolitics, societies, and markets," Bank of America said in a new note to clients.

The bank identified five themes that will change the business world after the crisis, and picked stocks that were good bets to take advantage of the shifts.