A recent Bank of America survey indicates that 54% of fund managers now perceive tech stocks as overvalued, with 60% believing global equities are too expensive, largely driven by concerns that the AI stock boom constitutes a bubble. AI was cited as the biggest tail risk, surpassing inflation and geopolitics, as the rally fueled by AI deals, some resembling dot-com era vendor financing, raises valuation alarms, a sentiment echoed by OpenAI CEO Sam Altman. This widespread concern is influencing investor positioning, with 'long gold' identified as the busiest trade among those surveyed.
A recent Bank of America survey reveals that 54% of fund managers now consider tech stocks overvalued, an increase from the previous month, with 60% viewing global equities as too expensive. This pervasive sentiment is largely driven by concerns that the current AI stock boom constitutes a bubble, identified as the biggest tail risk ahead of inflation and geopolitics. OpenAI CEO Sam Altman has also echoed these concerns, comparing the AI frenzy to the dot-com boom. The soaring valuations in tech are attributed to a flurry of AI announcements and significant deals involving companies like Nvidia, Oracle, AMD, and Broadcom. However, the circular nature of some of these transactions, reminiscent of dot-com era vendor financing, is fueling fears of unsustainable growth, a risk highlighted by Oxford Economics analysts. Per-ticker sentiment data further indicates negative sentiment for key AI players such as NVDA, ORCL, AMD, and AVGO. In response to these market dynamics, the survey notes that "long gold" has emerged as the busiest trade, signaling a defensive shift among institutional investors. While AI bubble concerns dominate, a potential second wave of inflation and the Federal Reserve's independence are cited as secondary, albeit significant, risks to monitor.
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Overall Sentiment
strongly negative
Sentiment Score
-0.75
Ticker Sentiment
