Bank of America Fund Manager Survey: Tech Stock Overweight Hits Six-Year High, Semiconductors Become Most Crowded Trade

Bond attractiveness is rising; if the 10-year U.S. Treasury yield rises to 6%, 37% of respondents would consider shifting from stocks to bonds.

Written by: Bu Shuqing, Wall Street Insights

Global fund managers' enthusiasm for tech stock allocations has reached its highest level since the rebound from the COVID-19 pandemic in 2020. Meanwhile, the market consensus on AI trading is quietly diverging, with semiconductor stocks becoming the most crowded trade.

According to Bank of America's latest monthly fund manager survey, the proportion of fund managers overweighting the tech sector jumped from 30% last month to 37%, the highest since August 2020. At the same time, about 45% of respondents believe that an AI bubble will emerge by 2027, while 42% hold the opposite view, indicating a clear market divide.

As this survey result was released, tech stocks are under pressure. On Tuesday, South Korean memory chip giants Samsung Electronics and SK Hynix saw significant declines, dragging the Asian stock benchmark index down to its lowest level since August, while futures contracts tracking the U.S. Nasdaq 100 index fell 0.6% on the same day.

Tech Stock Overweight Hits Six-Year High

Bank of America's survey shows that global investors are chasing the AI-driven stock market rally, with the overweight ratio for tech stocks reaching a six-year peak. Artificial intelligence has been the hottest trading theme in the stock market in recent years, driving the S&P 500 index to rise nearly 120% during a four-year bull market.

However, as investors begin to question whether the high capital expenditures associated with AI technologies can yield corresponding returns, some enthusiasm surrounding AI is waning. In this survey, respondents' views on the AI bubble are almost evenly split—45% believe the bubble will form by 2027, while 42% disagree, showing a substantial divergence in the market's assessment of AI's long-term value.

The survey was conducted from October 2 to 8, with 161 participants managing a total of $453 billion in assets.

Semiconductors Replace AI as the Most Crowded Trade

Although AI remains the core narrative driving the overall increase in tech stock allocations, investors' focus has shifted at the trading level. The October Bank of America survey shows that respondents have listed global semiconductor stocks as the most crowded trade in the current market, with AI concept stocks no longer holding the top position.

This shift has already been reflected in market performance. On Tuesday, in the Asian market, the significant declines of Samsung Electronics and SK Hynix directly dragged down regional stock indices, highlighting the volatility risk inherent in the highly concentrated semiconductor sector. When crowded trades encounter a reversal of sentiment, the adjustments of related assets are often more severe.

Bond Attractiveness Rises, Treasury Yield Becomes Key Threshold

As stock allocations heat up, pessimism in the bond market is also receding. The survey shows that investors' views on bonds have dropped to the lowest level of pessimism since May 2025.

Specifically, about 37% of respondents indicated that if the 10-year U.S. Treasury yield rises to 6%, it would prompt them to shift funds from stocks to bonds; another approximately 19% of respondents stated they are already making such allocation shifts. As of Tuesday morning, the 10-year U.S. Treasury yield was at 5.19%, still some distance from the aforementioned trigger threshold, but market sensitivity to interest rate trends is increasing.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.