A newly published survey from Bank of America asked investment-grade credit investors to name their top concern right now. Despite the recent hype about AI disrupting software companies and making corporate "knowledge worker" jobs obsolete, these investors are much more worried about the risk of AI stocks being in a bubble.
According to Bloomberg reporting, 23% of major credit investors surveyed by BofA said that "the threat of an AI bubble" is their top concern. Only 10% said "AI-driven corporate obsolescence" was their top-of-mind worry.
Here are a few reasons why the BofA credit investor survey is worth paying attention to, and what you might want to do with your money.
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Credit investors care about the risks of too much borrowing
Institutional credit investors like those surveyed by BofA have a worthwhile perspective on the AI bubble debate. That's because those organizations are pension funds, hedge funds, and insurance companies. They're experts at tracking how much money other companies are borrowing -- and evaluating whether those corporate bonds are worth buying.
The four largest AI companies (known as "hyperscalers") are Alphabet, Amazon, Meta, and Microsoft. Based on CNBC reports, these four companies are expected to spend about $700 billion combined in 2026 on capital expenditures for AI-related digital infrastructure and data centers.
So far, a lot of that capex money is coming from these highly profitable companies' current cash flows. But the AI companies are starting to borrow more heavily to build the future of AI. The BofA credit investor survey also forecast that hyperscalers will issue $285 billion of debt this year, up about 36% from the previous survey in December 2025.
The survey didn't comment on any specific company, bond, or stock. But the fact that credit investors are getting more nervous about a possible AI bubble is a sign of doubt that all this borrowed money is going to deliver a return on investment. According to this analysis, AI might be overhyped, and AI stocks might be overvalued.
How to invest your money in case of an AI bubble
If you agree that a possible AI bubble is a risk to your portfolio, you might want to diversify away from the big AI stocks and buy other assets like high-quality bonds, value stocks, or international stocks. Or buy the dip on software stocks, with the iShares Expanded Tech-Software Sector ETF (IGV 0.50%).
NYSEMKT: IGV
Key Data Points
This fund is down more than 20% year to date and has been hit hard by investor concerns that AI will disrupt software companies or even make software obsolete. But this software sell-off might be an overreaction, driven by unwarranted fears about future capabilities of AI that have not been proven yet. If the credit investors surveyed by BofA are on target -- and AI fears are overhyped -- software stocks could rebound and be a good buy for long-term investors.
