BofA Merrill Lynch Survey Ranks AI Stock Bubble as Top Tail Risk Again

The BofA Merrill Lynch fund manager survey is a key gauge of global asset allocation and market consensus. A “tail risk” is an event with a low probability but potentially severe consequences. Concerns about a bubble remain at the top of the list after a sharp rise in AI stock valuations, echoing the JPMorgan CEO’s warning that current market conditions resemble the run-up to the 2008 financial crisis.

BofA Merrill Lynch’s February survey showed fund manager optimism rising to a six-year high, with more than half expecting the global economy to achieve a “no landing” scenario in which growth continues and recession is avoided. However, an “AI stock bubble” again ranked as the biggest tail risk. Allocations to technology stocks have declined, while investors have also become less enthusiastic about U.S. equities.