Based on a Financial institution of America survey, 23% of buyers take into account the 'AI bubble' to be the principle concern, surpassing geopolitics and central financial institution errors. Fears about unsustainable progress in AI investments have exceeded considerations a few 'bubble within the credit score sector'.
For the primary time, the "AI bubble" has develop into the most important concern for credit score buyers, based on a Financial institution of America Corp. consumer survey, UNN experiences just about Bloomberg.
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"Few are involved about geopolitics or central financial institution coverage errors," Financial institution of America strategists, together with Barnaby Martin, wrote in a word on Tuesday.
About 23% of investment-grade respondents cited the specter of an "AI bubble" as their high concern, in comparison with 9% in Financial institution of America's earlier survey in December, the publication writes.
Based on the survey, fears in regards to the doubtlessly unsustainable progress of investments and valuations of AI firms surpassed "credit score bubbles" in significance. Issues about commerce tensions and a worldwide recession had been additionally seen as the most important danger in 2025.
Traders working with investment-grade bonds raised their forecasts for giant company bond issuance to $285 billion this 12 months, a "vital soar" in comparison with the $210 billion anticipated within the December survey.
"Nonetheless, buyers are extra optimistic in regards to the future scale of technological change, with solely 10% saying their greatest concern is company obsolescence brought on by AI," the strategists wrote.
In the meantime, inflows are the principle issue figuring out credit score unfold ranges and ample to offset the weakening of bonds brought on by AI-related danger, they famous.
The February survey included 54 Financial institution of America purchasers working with high-yield and high-quality bonds, together with insurance coverage firms, pension funds, and hedge funds.
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