Chasing the AI trade, money managers pushed their tech exposure to the loftiest level since the early pandemic rebound. The share overweight the sector climbed to 37% from 30% in September, marking the highest reading since August 2020. Artificial intelligence has led the equity story lately, powering roughly a 120% climb in the S&P 500 over a four-year bull stretch.
Still, some of that glow is dimming as investors weigh whether future profits will square with the heavy AI spending. Looking ahead, 45% of those polled expect an AI bubble to show up in 2027, while 42% do not.
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Participants flagged global semiconductor stocks as the most crowded trade right now. On Tuesday, steep losses in South Korean memory leaders Samsung Electronics and SK Hynix dragged a key Asia equity gauge to its weakest level since August. Futures tied to the Nasdaq 100 dipped 0.6% the same day.
Sentiment on fixed income improved to the least gloomy since May 2025. About 37% said they would rotate from equities into bonds if the 10-year Treasury yield reached 6%, and roughly 19% said they have already started shifting. The 10-year sat at 5.19% on Tuesday morning. For everyday portfolios, that tug-of-war between tech momentum and rising yields is the backdrop to watch, because it shapes everything from stock multiples to how attractive a plain old bond looks next to your favorite growth name.
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