Global investors remain ‘uber-bullish’ but warn of corporate overspending

Summary

A Bank of America survey shows global fund managers remain highly optimistic about economic growth while increasingly cautioning that corporate capital spending may be running ahead of returns. Sentiment remains tilted toward equities and commodities even as AI bubbles are cited as a key tail risk for 2026.

MILAN, Feb. 17, 2026 — Global investment sentiment has reached levels described as “uber-bullish,” yet fund managers are signaling rising caution about corporate spending discipline.

According to Bank of America’s monthly survey of 162 fund managers overseeing about $440 billion in assets, macro-optimism has climbed to its highest level in nearly two years, reflecting expectations of a broad economic upswing.

The overinvestment dilemma

A growing share of respondents indicated that companies may be investing too aggressively, highlighting a shift in focus from growth at any cost toward financial resilience.

• Balance sheet strength: Investors increasingly favor stronger balance sheets over further increases in capital expenditure.
• Earnings outlook: Expectations for global earnings growth have moved above 10%, the strongest outlook since 2021.
• Cash levels: Cash balances edged up to 3.4% in February from 3.2% in January, signaling a modest move toward caution.

Market allocations and tail risks

The survey underscores continued risk appetite alongside emerging concerns.

• Asset positioning: Fund managers remain overweight equities and commodities while staying underweight bonds.
• AI bubble fears: For the second consecutive month, an “AI bubble” was identified as the top tail risk to global markets, reflecting both enthusiasm and unease about the scale of investment in the sector.

Why this matters

The survey highlights a subtle shift in market psychology. While optimism about growth remains strong, investors are becoming more selective about capital spending, favoring companies that demonstrate earnings discipline and financial stability.

FAQs

Q1: What does “uber-bullish” mean?

It describes overwhelmingly positive investor sentiment, typically reflected in high equity allocations and low recession expectations.

Q2: Why are investors concerned about corporate spending?

There is concern that heavy investment—particularly in AI infrastructure—may take time to generate returns.

Q3: What are the biggest market risks?

The survey identifies an AI bubble as the leading tail risk, followed by geopolitical and inflation concerns.

Q4: How strong are earnings expectations?

Fund managers expect global earnings growth to exceed 10%, the highest outlook since 2021.