According to a recent Bank of America survey, 23% of credit investors expressed concern over the risk of an artificial intelligence (AI) bubble, a significant increase from just 9% in December 2025. The survey highlights worries primarily among institutional investors managing large amounts of capital, marking a shift in sentiment as AI expenditures by major tech firms are projected to reach $700 billion by 2026.
The four largest AI hyperscalers—Alphabet, Microsoft, Meta Platforms, and Amazon—are on track to incur these costs related to AI infrastructure. While none have seen credit rating downgrades so far, their share prices have dropped year to date, raising concerns that the substantial investment may not yield profitable returns, which could create risks for both equity and bond investors.
To mitigate potential risks associated with an AI bubble, experts suggest shifting investments towards value stocks or small-cap stocks, which may offer more stability compared to the highly fluctuating AI sector. This strategic adjustment could help protect portfolios as market dynamics evolve.
