Episode summary
BofA’s Favorite Non-AI Stocks. Plus, Nvidia’s Penny Dividend | Barron's Streetwise
Barron's Streetwise
· · Hosts: Jack Bary
Summary
The host argues that the market’s dividend yield has become so thin that it looks like a warning sign, not a footnote. Using Nvidia’s unchanged one-cent quarterly payout as the hook, he says today’s 1.1% S&P 500 yield echoes periods when investors prized growth so much that dividends were neglected, including the dot-com era. His point is that dividends still matter because they cushion downturns, support cash flow during recessions and layoffs, and can be reinvested at lower prices.
He backs that up with historical comparisons: dividend growers have outperformed non-payers over long stretches, and in market selloffs, dividend-paying stocks have tended to fall less than stocks that pay nothing. He suggests investors consider dividend ETFs such as ProShares S&P 500 Dividend Aristocrats and Schwab US Dividend Equity, while acknowledging that those portfolios have lagged the S&P 500 during the AI-led surge.
The second half turns to Bank of America’s list of 16 non-AI stock picks, framed as a way to look beyond megacap tech. TJ Thornon says the list is intentionally broad rather than purely defensive, and includes names such as Eversource, Freeport-McMoRan, KeyCorp, Disney and others. The broader case is that market leadership is becoming more differentiated, and investors may want exposure to stocks with less dependence on AI capex.
Key takeaways
- The host says Nvidia’s one-cent dividend is a sign that the market’s yield has been squeezed to dot-com-era levels, with the S&P 500 yielding about 1.1%.
- The host argues dividend payers have historically held up better in downturns and says non-payers fell about twice as much as payers in big selloffs.
- TJ Thornon says BofA’s 16-stock non-AI list is not a pure defensive portfolio; it mixes defensives, cyclicals and value names.
- Thornon says BofA’s strategist still sees about an 8% 12-month return for the market, but prefers the average stock over the index because AI multiples look stretched.
- The host points investors to dividend ETFs like SCHD, which he says yields 3.8% and screens for sustainable yield more rigorously.
Notable quotes
“I want to talk to you about the stock market's most important penny. I'm referring to Nvidia's dividend”
“Dividends are meant to be an important part of total returns. But they're more than that”
“When the market crashes, dividend payments tend to hold up much better than paper earnings”
“there were a lot of reasons why we did it. I think one is that we all know the AI stocks pretty well, right”
“you know, there are different attributes in in that list. You know, we could have also said, all right, well, we're also looking for defensive names”
How the episode opens
I'm going to have to get energy somehow. Do you have like a hype song? Alexa, play Fortunate Sun by Credence Clearwater Revival.
Oh, nope. Let me find some licensed music that we can actually use. There we go.
You're listening to the Baron Streetwise podcast. I'm Jack How. With me, our audio producer, Alexis Moore.
Hi, Jack. My email box is filling up with all the 2026 look ahead reports, the predictions for what's going to come to pass in the stock market. Everyone sounds so confident.
Here's some This is someone I don't know. It just says in the subject line, "2026 will break the 4-year crypto cycle. I think crypto has already started tanking.
So, I don't know if we're breaking the tanking cycle or the pre-tanking cycle and it's going to tank more. I don't know. Here's one from someone I do know.
Barkclays. This is uh Venu Krishna. We had him on the podcast just a little while ago.
Says, "Our 2026 S&P 500 price target goes to 7400 from 7,000. It was taking earnings estimates up. It talks about mega caps continuing to execute.
Talks about the AI race showing no signs of slowing. That price target works out to 12% upside from here, almost 13%. That would be nice.
I don't know if it's going to happen. Stocks look very expensive. The S&P is at 25 times earnings.
I'm not predicting a crash, but I'm also definitely predicting a crash. They just happen every so often. The key is I can't tell you whether it will be next week or next year or many years from now.
Not very helpful, I know. So, you either stick with the S&P 500 and hope that prices continue to climb or you diversify into something that can give you downside protection.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- non-ai stocks
- bank of america stock picks
- nvidia dividend
- dinky dividends
- market sentiment
Companies and tickers mentioned
- BAC
- NVDA
- Bank of America
- Nvidia
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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