Tech stocks still set for record $75 billion inflow in 2025, says BofA

BofA's weekly flow note shows tech stocks remain in demand and are on track for a record $75 billion inflow this year, taking in $4.4 billion in the week to Wednesday despite valuation concerns and a 2% drop in the Nasdaq on Thursday after earlier gains; crypto funds suffered a $2.2 billion outflow—the second-largest on record—pushing bitcoin and ether to multi-month lows, while U.S. Treasuries saw $8.8 billion of inflows, their biggest since April, signaling a broader risk-off shift among investors.

Analysis

BofA's weekly flow note shows tech stocks are on track for a record $75 billion inflow this year and recorded $4.4 billion of inflows in the week to Wednesday, underscoring persistent demand even as the Nasdaq has risen about 14% year-to-date and hit an all-time high in late October. The tech-heavy index, however, fell 2% on Thursday, highlighting short-term volatility and valuation sensitivity in the sector.

Crypto funds experienced a $2.2 billion outflow in the same week—the second-largest on record—with bitcoin and ether falling to multi-month lows, signaling a broad flight from risk assets. Concurrently, U.S. Treasuries received $8.8 billion of inflows, the biggest since April when tariff-driven market stress occurred, indicating a clear risk-off rotation toward safe-haven assets.

The coexistence of large tech inflows and simultaneous Treasury demand suggests bifurcated positioning: active allocations to growth remain but are vulnerable to sudden sentiment shifts that prompt rebalancing. Weekly flows are therefore a leading indicator of market liquidity and risk appetite; continued Treasury inflows or further crypto redemptions would raise downside risk for high-valuation tech names despite ongoing demand.

Key Decisions for Investors

• Rebalance tech exposure: consider trimming or hedging high-multiple and momentum tech positions given valuation sensitivity and the Nasdaq's recent 2% drop despite $4.4bn weekly inflows
• Use weekly BofA flow readings, Nasdaq direction, and Treasury inflows as real-time signals for risk-on/risk-off shifts, reduce cyclical exposure if Treasury inflows persist or crypto outflows accelerate
• Avoid increasing crypto exposure until flows stabilize and price action confirms a bottom after the $2.2bn outflow and multi-month lows in bitcoin and ether
• Maintain a tactical allocation to high-quality fixed income or cash as insurance against equity drawdowns while monitoring whether tech inflows translate into durable demand