U.S. GDP dropped 1.4% in the first quarter of 2022, and the SPDR S&P 500 ETF Trust (NYSE:SPY) is down 16.3% year-to-date as investors become increasingly concerned about the possibility of a U.S. recession in 2022. However, Bank of America economist Aditya Bhave said this week that underlying economic data suggests U.S. recession risks are "low at the moment."
If the Federal Reserve can successfully get inflation under control in coming months, the recent sell-off in U.S. stocks could turn out to be an excellent long-term buying opportunity.
Here are five high-quality U.S. stocks to buy to bet on an economic rebound in the second quarter and beyond, according to Bank of America.
Microsoft Corporation (NASDAQ:MSFT)
Microsoft is the world's largest public software company and is best known for its Office professional software, Windows operating system and Azure cloud services business. Analyst Brad Sills says Microsoft is well-positioned to generate double-digit earnings growth for at least the next three to five years.
He says Azure cloud infrastructure sales, further penetration of Office 365 productivity software and improving Games and Game Pass profits will be growth drivers for the company and its stock. In fact, he projects Microsoft can expand its margins by between 0.7% and 1.1% in the coming years.
Bank of America has a Buy rating and $365 price target for MSFT stock.
Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL)
Alphabet is one of the largest online advertising companies and is the parent of Google and YouTube.
Analyst Justin Post says Alphabet's recent first-quarter earnings report was mixed, given tough year-over-year comps and foreign exchange headwinds. However, he says YouTube engagement numbers were positive and Alphabet has a more stable business than many big tech competitors.
He says Alphabet should leverage its artificial intelligence and machine learning advantages in coming years, and the company has potential to ramp up its buybacks to support the stock.
Bank of America has a Buy rating and $2,940 price target for GOOGL stock.
Also Read: Despite Recession Fears, This Indicator Says The US Economy Is Booming
Amazon.com, Inc. (NASDAQ:AMZN)
Amazon is the U.S. leader in cloud services and e-commerce. Amazon shares have taken a beating in 2022, falling 35% year-to-date and underperforming all of the other stocks on this list. Amazon remains Post's top FANG stock pick for 2022, even as it navigates inflation, lower labor productivity and overcapacity headwinds.
Post said Amazon Web Services cloud revenue growth held up well in the first quarter, growing 37% from a year ago compared to 39% growth in the fourth quarter.
Bank of America has a Buy rating and $3,770 price target for AMZN stock.
Mastercard Inc (NYSE:MA)
Mastercard is a technology-focused payment network and global credit card leader.
Analyst Jason Kupferberg says Mastercard's first-quarter earnings beat and guidance hike were impressive, and the company's cross-border travel sales volumes were up 10% from pre-pandemic 2019 levels as of April 21. A faster-than-expected rebound in travel and consumer spending is bullish for Mastercard.
Despite Russia headwinds, Mastercard's updated second-quarter and full-year guidance calls for revenue growth in the high teen percentage range. Mastercard's hot start to the second quarter bodes well for its next earnings report.
Bank of America has a Buy rating and $402 price target for MA stock.
Coca-Cola Co (NYSE:KO)
Coca-Cola is the world's largest publicly-traded non-alcoholic beverage company. It's also the only stock on this list that has gained ground in an extremely weak 2022 market, climbing 8.8% year-to-date. Analyst Bryan Spillane says Coca-Cola offers investors balanced sales growth, market share gains and relatively stable earnings.
Despite headwinds from inflation, the war in Ukraine and ongoing pandemic disruptions in China, Spillane says Coca-Cola is benefitting from increasing consumer mobility, easing supply chain bottlenecks and a rebound in on-premise sales.
Bank of America has a Buy rating and $70 price target for KO stock.
