AI Stock Rally Is in Boom Phase Not Euphoria, BofA Survey Shows

Bank of America Corp. released a survey this week indicating that the current surge in artificial-intelligence stocks is in a "boom phase" rather than a state of euphoria. The survey, which polled 226 fund managers overseeing $670 billion in assets, revealed that 74% of respondents believe the AI stock rally is in a boom phase, while only 10% consider it to be in a bubble. This sentiment suggests a sustained upward trend is anticipated by a significant majority of investors. The primary driver identified for this market movement is the fear of missing out (FOMO), with 58% of participants citing it as the main reason for investing in AI stocks. This indicates a strategic, albeit potentially speculative, approach to the technology's growth potential. Furthermore, the survey highlighted that investors are actively increasing their exposure to AI, with net 32% of fund managers reporting an overweight position in technology stocks, a figure that has steadily climbed since October 2023. This sustained interest and increasing allocation underscore the market's confidence in the long-term viability and profitability of AI-related companies. The findings suggest that while investor enthusiasm is high, it is currently underpinned by a belief in fundamental growth rather than irrational exuberance, pointing towards continued investment in the sector.