By Martin Baccardax

Global fund managers are hot on stocks heading into the middle of the first quarter, according to a closely tracked survey from Bank of America, but aren't as keen on chasing U.S. equity markets amid growing concerns over the pace of artificial-intelligence spending.

BofA's monthly Fund Managers' Survey, published Tuesday, showed the world's biggest investors, which control more than $500 billion in assets, are the most overweight they've been on stocks in 14 months. They are, betting on stronger corporate earnings growth, a weaker U.S. dollar, and solid domestic growth.

A net 24% of survey respondents see earnings rising by more than 10% this year, the highest since August 2021, while 38% see Kevin Warsh's appointment as Federal Reserve chairman weighing on the greenback. Even more, according to the survey, see it leading to higher Treasury bond yields.

Those same investors are also rotating out of U.S. stocks in favor of other markets, and opting for underweight positions in the dollar, Treasuries, and the S&P 500.

Part of that positioning, the survey indicated, is tied to concerns over overspending on AI investments. The so-called big four hyperscalers -- Microsoft, Alphabet, Amazon.com, and Meta Platforms -- have committed to $650 billion in data center capex this year, a 60% increase from 2025 levels, with billions more likely needed to meet expected demand before the end of the decade.

A record 35% of fund managers are telling company CEOs to focus on balance-sheet improvements over new investment, the survey noted, as fears of an "AI bubble" remain the biggest risk cited in the February poll.

Stock market action has, in part, reflected that concern, with the S&P 500 now down 2% over the past 10 days, its biggest pullback since November, and the Nasdaq Composite down more than 3% for the year.

The BofA survey also detailed some of the ongoing rotation within U.S. equities. Investors are moving to energy and materials stocks at the quickest pace since April 2022, and overweight value stocks versus growth stocks by the largest margin since April 2025.

From a sector perspective, energy and materials are outperforming the broader market by a huge margin this year, rising 21.6% and 17.6%, respectively, since the start of the year. The S&P 500, meanwhile, has declined 0.14% in 2026.

Away from the U.S., major indexes around the world are also outpacing gains in the U.S, with Europe's Stoxx 600 benchmark up 3.9% so far this year, Britain's FTSE 100 rising 5.7%, and Japan's Nikkei 225 surging 9.1%.

Write to Martin Baccardax at martin.baccardax@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 17, 2026 07:22 ET (12:22 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.