Investing.com -- The stock market suffered a sharp sell-off Monday, with the S&P 500 dropping 1.46% and the Nasdaq falling 3% after Chinese startup DeepSeek’s AI breakthrough sparked concerns over lower AI-related spending.

Analysts at Bank of America believe that the pullback created idiosyncratic buy opportunities in certain stocks. They highlighted Corning Incorporated (NYSE:GLW), Hewlett Packard Enterprise Co (NYSE:HPE), Western Digital (NASDAQ:WDC), and Seagate Technology PLC (NASDAQ:STX), noting that “each name has compelling growth drivers separate from Gen AI/datacenter spending.”

BofA also likes Apple Inc (NASDAQ:AAPL) and IBM (NYSE:IBM), citing their defensive nature and potential for growth amid market volatility.

Apple is one of the rare technology stocks that rose higher on Monday.

“On a day when AI stocks were down double-digit percent, Apple shares were up 3% as investors realize the potential for edge AI and there is a flight to safety driven by Apple’s earnings resiliency,” analysts led by Wamsi Mohan noted.

“If DeepSeek is truly able to lower the cost of AI inferencing and better models are developed faster and cheaper, then edge AI applications and Apple as the edge device maker, stands to benefit. We view Apple as the ultimate play on having an LLM in your pocket,” they added.

BofA analysts believe several key drivers could drive upside in the tech giant’s shares, such as the expected launch of the iPhone SE in March or April, insourcing of modem production to improve gross margins, the Worldwide Developers Conference (WWDC) in June that may feature AI-driven use cases, and the release of the iPhone 17 in September 2025.

For IBM, BofA highlighted catalysts including a new mainframe cycle, acceleration in its Software (ETR:SOWGn) division, and mergers and acquisitions activity. Analysts project higher growth in Software for the next three years, driven by Enterprise AI opportunities and the launch of a new Mainframe (z17) in 2025.

“For IBM, AI represents an opportunity in its Consulting business as it seeks to position itself as the go-to partner of choice for AI consulting.

Corning's stock fell by 8.7% on Monday, but BofA analysts point out multiple key drivers that could foster recovery and growth. These include the cyclical recovery in its Optical business, the Lumen/Broadband Equity, Access, and Deployment (BEAD) program ramps, opportunities in the Solar sector, consistent profitability in the Display segment, and its upcoming Investor Day on March 18.

For HPE, which saw its shares sink 5.8%, the firm points to the Juniper Networks (NYSE:JNPR) acquisition and cost reduction initiatives as factors that could improve margins.

“AI server exposure is not embedded in the valuation multiple,” analysts led by Wamsi Mohan added.

BofA also sees a significant value unlock for Western Digital with its anticipated spin-off, estimating value creation between $5-10 billion. The firm also references the SanDisk Analyst Day (February 11) and Western Digital Analyst Day (February 12) as key catalysts. The company’s stock lost 4.5% Monday.

Seagate also saw a pullback, but BofA remains bullish on the stock, citing improvements in the HDD industry structure since the last downturn.

The company's focus on ramping up Heat-Assisted Magnetic Recording (HAMR) technology, increasing gross margins through a higher mix of high-capacity/HAMR drives, and continued data center spending (excluding AI) are seen as primary growth drivers.

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