Bank of America is too large to fail and can gain market share anytime a banking crises impact regional banks.
The consumer banking and investment services are still growing and offer multiple pathways to higher profits.
Any slowdown in consumer spending can hurt the bank. Although financial stress is high, people continue to spend more money.
10 stocks we like better than Bank of America ›
While fintech stocks have delivered flashy headlines and sharp volatility, Bank of America(NYSE: BAC) has outperformed the S&P 500 year to date. It has also kept up with the major index over the past five years while offering a 2% yield for investors.
Bank of America has been a solid stock for several years, but past results don’t guarantee future success. These are some of the details to consider before deciding if Bank of America stock makes sense for your portfolio.
Image source: Getty Images.
Bank of America is one of the largest global banks that continues to gain market share. When regional banks encounter financing issues, more people turn to safe bets like Bank of America.
Even when there aren’t any banking crises, more people continue to gravitate toward the financial institution. The company delivered 11% year-over-year revenue growth in Q3, reaching $28.1 billion in the process. Net income came in at $8.5 billion, which was up by 23% year over year. Rising margins and a growing business give Bank of America enough capital for dividend hikes, stock buybacks, and reinvestments back into the company.
While you might get higher returns with fintech stocks and banks that aren’t as established, Bank of America investors pile into the stock knowing that they are getting a durable dividend stock. It’s no wonder Bank of America is the third-largest holding of Warren Buffett’s Berkshire Hathaway.
Bank of America has multiple parts of its business that continue to drive growth. The consumer banking segment just had its 27th consecutive quarter of net account growth after 212,000 additional customers created new checking accounts. The bank now oversees $580 billion in consumer investment assets, up by 17% year over year, and the bank also announced 1 million new credit card openings in the quarter.
Growth is a prerequisite for determining if a stock is a buy or a hold. Prolonged declines or stagnation may warrant selling shares, especially since you can find more attractive opportunities in the stock market. Luckily for investors, Bank of America’s consumer banking segment is growing, and that also applies to other parts of its corporate umbrella.
Bank of America’s Global Wealth and Investment Management services grew by 10% year over year to bring in $6.3 billion in Q3. Higher asset fees and rising assets under management were key contributors to this increase. Bank of America also saw gains for its Global Banking and Global Markets segments.
The bank has deeply integrated itself into how people spend, save, and invest money. It’s easy to see the financial institution’s key segments continuing to grow as long as consumer spending and assets remain strong. Right now, that seems to be the case.
Personal consumption expenditures increased by 2.8% year over year in September. It indicates people are still increasing how much they spend, and some people find extra money through loans and credit cards.
Consumer spending continues to rise, but that doesn’t mean everyone is feeling good about their finances. Nearly 70% of Americans say that financial uncertainty has made them feel depressed and anxious, and all of that built-up money stress can eventually impact consumer spending.
That’s a long-term worry, and even if consumer spending goes down, regional banks will get hit the hardest. Weaknesses in regional banks will help Bank of America and other giants further consolidate their control in the banking industry. Still, it is bad for the industry as a whole if consumer spending goes down. That development can result in more loan defaults, which would affect Bank of America’s bottom line.
Bank of America is a good stock to buy based on the economic backdrop at the moment and its well-diversified business. The current price presents a good entry point, and a 2% dividend yield provides some cash flow as shareholders wait for the next rally. It’s one of the biggest banks and stands to benefit when regional banks face stress.
Declines in consumer spending can weaken the bullish thesis for Bank of America, but despite many people being stressed about money, spending continues to rise. It’s a good setup for a prolonged rally in Bank of America stock.
Before you buy stock in Bank of America, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bank of America wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $509,470!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,167,988!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 196% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of December 22, 2025
Bank of America is an advertising partner of Motley Fool Money. Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
Is Bank of America Stock a Buy, Sell, or Hold in 2026? was originally published by The Motley Fool
