Global stocks are embroiled in a downward spiral as concerns over an AI bubble continue to mount — and for the first time in two decades, fund managers are flagging concerns about companies “overinvesting.” That’s according to the latest iteration of Bank of America ‘s Global Fund Managers Survey. The poll of 172 fund managers, who collectively manage assets worth $475 billion, was carried out between Nov. 7 and 13 — just before stocks around the world started selling off . ‘Slow down, hyperscalers’ In a note accompanying the findings on Tuesday, BofA strategists said that investors were still bullish on stocks in the second week of November, but noted that bubble concerns were mounting. For the “first time in 20 years investors say companies [are] ‘overinvesting’ (read ‘slow down, hyperscalers’),” they said in their analysis of the survey results. The findings showed that it was the first time since Aug. 2005 that a majority of Fund Manager Survey participants — net 20% — said there was too much capital expenditure among companies. “This jump is driven by concerns over the magnitude & financing of the AI capex boom,” BofA’s strategists said. However, they noted that new concerns related to overspending by AI hyperscalers “is not translating into broad balance sheet concerns for the corporate sector.” Asked what companies should do with cash flow, one in three fund managers said firms should shore up their balance sheets, 31% said they should return cash to shareholders, and 29% said firms should increase capital spending. AI bubble? The potential fallout from an AI bubble bursting has been a hot topic in financial markets over recent weeks. On Tuesday, global stocks resumed a sell-off fueled by concerns about valuations of AI-linked equities. Big Tech stocks at the center of the AI boom, including Nvidia , Palantir , and Microsoft , were among those posting notable declines on Tuesday. .IXIC YTD mountain Nasdaq According to BofA’s survey, 45% of global fund managers named an AI bubble as the biggest risk, up from one in three respondents the previous month. Of those surveyed, 53% said AI stocks are already in a bubble — down from a record 54% in October. Meanwhile, BofA said a record 63% of survey participants now believe global equity markets are currently overvalued. Still, most of those who shared their thoughts with the bank appeared to see at least some upside ahead for stocks. The vast majority of fund managers told BofA they expect the S & P 500 to end 2026 in the 7,000-7,500 range — a premium of between 6%-14% on Tuesday’s closing price. Looking beyond the U.S. could be even more rewarding, many respondents said, with 42% of those polled saying they thought international stocks would be the best-performing assets in the year ahead, compared to around one in five who said the same of U.S. equities. As AI jitters set in, BofA found there had been a month-on-month increase in allocation to healthcare, consumer staples and banking stocks, while allocation to consumer discretionary, telecom, industrials and tech stocks was wound down. Tech allocation hit a 6-month low in November, the survey found, while allocation to global banks was at its highest in almost a year.
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