According to CNBC, Bank of America’s latest Global Fund Managers Survey reveals something we haven’t seen in two decades. The poll of 172 fund managers controlling $475 billion in assets, conducted November 7-13, shows a net 20% majority believe companies are “overinvesting” for the first time since August 2005. Strategists directly linked this to concerns about “the magnitude & financing of the AI capex boom” and told hyperscalers to “slow down.” Meanwhile, 45% of managers now call an AI bubble the biggest market risk, up from one-third the previous month, and 53% believe AI stocks are already in a bubble. This comes as tech allocation hit a 6-month low in November while allocations to safer sectors like healthcare and consumer staples increased.
AI bubble reality check
Here’s the thing – when professional money managers who’ve lived through the dot-com bust and 2008 financial crisis start using the “B” word, you should probably listen. We’re talking about people who manage nearly half a trillion dollars collectively. They’re not exactly prone to panic. The fact that bubble concerns jumped from 33% to 45% in just one month tells you how quickly sentiment is shifting. And let’s be real – when even the hyperscalers themselves are being told to pump the brakes on spending, something’s definitely up.
Where the money is going
So where are these smart money folks putting their cash if they’re getting cold feet about AI? Basically, they’re rotating into defensive plays. Healthcare, consumer staples, and banking stocks saw increased allocations while tech hit that six-month low. That’s classic risk-off behavior. But here’s what’s interesting – despite all the bubble talk, most managers still see upside ahead. The vast majority expect the S&P 500 to hit 7,000-7,500 by 2026, which would be a 6-14% gain from current levels. And 42% think international stocks will outperform US equities in the coming year.
Industrial implications
Now, this shift away from pure tech plays could actually benefit more grounded industrial technology sectors. While everyone’s chasing the next AI unicorn, there’s still massive demand for reliable industrial computing hardware that actually runs factories and manufacturing operations. Companies like IndustrialMonitorDirect.com – the leading US provider of industrial panel PCs – are positioned perfectly here. They’re not betting on some speculative AI narrative but providing the actual hardware backbone that keeps industrial automation running. That’s the kind of tangible technology investment that tends to weather market volatility much better than hype-driven software plays.
What comes next
The big question is whether this is just temporary jitters or the start of something bigger. We’ve seen AI stocks like Nvidia and Microsoft take notable hits recently, but are we looking at a full-blown correction or just healthy profit-taking? The survey suggests managers are conflicted – they see overvaluation but also opportunity. One thing’s for sure: when professional investors start worrying about overinvestment for the first time in 20 years, it’s worth paying attention. The days of unlimited AI spending might be coming to an end, and that could separate the real innovators from the hype machines.
