Around 56% of fund managers participating in the bank's monthly poll selected "boom" as the term that most accurately characterizes the present phase of the artificial intelligence market cycle. This stage is defined by a rally accelerating and attracting more participants driven by the fear of missing out.
Only 21% of respondents perceived the sector as being in a "euphoria" phase, a period marked by share valuations reaching extreme levels. A further 9% described AI as being in a "profit-taking" stage, where major investors begin selling in anticipation of a potential bubble burst.

The survey, which polled investors managing a combined $465 billion, was carried out between June 5 and June 11. This timing preceded the stock market debut of Elon Musk's SpaceX. The loss-making company's IPO valuation of $1.8 trillion fueled concerns that technology and AI stocks might be in a bubble.

Concurrently, the Philadelphia Stock Exchange Semiconductor Index, which monitors industry stocks, has nearly doubled year-to-date. Shares of companies like Micron, ARM, and Intel have surged well over 200% during this period.

The BofA survey also indicated some apprehension regarding the tech sector. Four out of five respondents identified buying and holding global semiconductor stocks as the most crowded trade currently. At 80%, this reading represents the highest level in the survey's history.

Overall, investors modestly reduced their overweight position in technology to 26% from 33%. They also trimmed their global equity overweight to 38% from 50%. Despite these adjustments, investors remain heavily allocated to equities, maintaining cash holdings at historically low levels.