BAC's Strategic AI Investments: Unlocking New Revenue Streams

Bank of America BAC is aggressively investing in artificial intelligence (AI) to boost productivity and create new revenue streams. With plans to allocate $4 billion from its $13 billion technology budget into AI and related digital initiatives, the bank is demonstrating a clear link between technological investment and both top-line upside and operational cost efficiency.

Bank of America’s leadership has directly tied AI initiatives to measurable improvements in bankers’ productivity and client revenue generation. Automation and AI tools are freeing up bankers to focus more on higher-value activities, facilitating quicker onboarding, powering client recommendation engines and predicting customer needs. These enhancements have reportedly lifted cross-selling effectiveness and relationship expansion, resulting in increased revenues across divisions. 

Bank of America is deepening AI integration across customer-facing and internal operations to drive new revenue and stronger client engagement. Intelligent relationship tools, predictive analytics and personalized digital experiences are central to its strategy, while AI-powered automation in risk, compliance and fraud detection is expected to deliver scalable efficiencies and cost savings.

The bank’s investments in strategic AI and tech aim to further boost productivity and unlock new lines of business, with management pointing to a direct correlation between technology deployment and quarterly revenue improvements. This suggests BAC expects AI to move from a defensive, cost-reduction tool to an offensive enabler of revenue growth and long-term competitive advantage.

Bank of America’s AI ambition is more than hype. It represents a tangible, bottom-line driver already showing results. With continued management commitment to AI spend and a clear track record of linking technology with quarterly revenue outperformance, the company is well-positioned to sustain above-peer revenue momentum as AI adoption scales and sophistication advances.

How BAC Stacks Up Against Peers in Using AI

BAC’s peers, JPMorgan JPM and Citigroup C, are investing heavily in AI, automation and digital transformation to improve efficiency, personalize services and maintain a competitive advantage.

JPMorgan is leading AI-driven banking by embedding advanced models across its operations, from fraud detection and credit risk to personalized wealth management. Its AI platforms improve efficiency, compliance and customer experience, while generative tools streamline workflows. This blend of innovation and scale reinforces JPMorgan’s position as the top digital banking brand in the United States.

Citigroup is accelerating a broad AI-driven transformation, retiring legacy systems and deploying chatbots while advancing “Agentic AI” to manage complex financial tasks. Its strategy spans personalized wealth, corporate banking and real-time lending. With nearly 20 million mobile users and strong digital engagement, Citigroup is integrating digital and traditional channels to deliver seamless, secure, data-driven experiences.

Bank of America’s Price Performance, Valuation & Estimates

Shares of Bank of America have risen 18.3% this year. 

From a valuation standpoint, Bank of America trades at a 12-month forward price-to-earnings (P/E) of 12.14X, below the industry. 

The Zacks Consensus Estimate for Bank of America’s 2025 and 2026 earnings implies year-over-year growth of 15.6% and 14.5%, respectively. In the past week, earnings estimates for 2025 and 2026 have been revised marginally lower to $3.79 and $4.34, respectively.

Bank of America currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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