The market’s favorite party might be getting too crowded
Bank of America’s latest Global Fund Manager Survey reads like a “risk-on” group chat that got a little too confident. Equity allocations are at their highest level since 2021, cash is down to 3.5% of assets, and the classic BofA contrarian alarm is basically flashing neon.
That cash reading matters because BofA’s rule of thumb says sub-4% is a sell signal. Translation: when everyone is already all-in, there’s not much fresh money left to push prices higher.
AI is still the center of the universe
The wild part? Investors aren’t just bullish — they’re bullish in almost the exact same places:
- 53% call long global semiconductors the most crowded trade
- 71% don’t expect an AI hyperscaler to cut capex in 2026
- 32% say an AI bubble is the biggest market risk
- 38% think AI spending could be the source of a systemic credit event
So yes, people are worried about AI. They’re just not worried enough to leave. Classic Wall Street behavior.
What BofA wants you to do instead
Hartnett’s contrarian playbook is basically the opposite of the current mood: rotate, don’t reload. The survey points to longs like bonds and consumer staples, while the crowd is still hanging out in tech, banks, and semiconductor-adjacent bets like SMH and SOXX.
Big picture: this isn’t a warning that stocks have to fall tomorrow. It’s a reminder that when everyone is positioned for the same sunny outcome, even a small cloud can cause a very annoying afternoon.