Financial institution of America’s 2026 market outlook paints an image of robust international development, led by AI funding, however warns that volatility may rise as buyers start to know the complete influence of the expertise on the economic system.
The financial institution’s international analysis group expects U.S. GDP to develop 2.4% year-over-year by the top of 2026, above consensus, pushed by enterprise funding, fiscal stimulus, and up to date fee cuts. China’s development can be projected to beat expectations, with forecasts at 4.7% for 2026 and 4.5% in 2027.
However probably the most vital pressure shaping the financial institution’s forecast is synthetic intelligence.
The surge in AI spending is already lifting GDP and BofA doesn’t see a bubble — but. “We’re optimistic on the 2 most influential economies,” stated Candace Browning, head of BofA international analysis. “Issues about an imminent AI bubble are overstated.” In keeping with the report, AI-related capital funding is poised to increase additional subsequent yr, supporting what some economists imagine may turn into a brand new funding cycle.
Bitcoin BTC$91,878.33 miners have benefited from the AI increase in 2025, as surging demand for high-performance computing has pushed up the worth of their infrastructure. A number of publicly traded mining companies reported elevated income this yr not simply from mining, however from leasing out information middle capability to AI firms in want of power-hungry GPUs.
IREN (IREN) is up 337.15% year-to-date whereas Cipher Mining (CIFR) is buying and selling almost 300% larger. TeraWulf (WULF) is up 190% over the identical interval. The beneficial properties as come whilst bitcoin has did not convincingly get away this yr, persevering with to commerce across the $90,000 space.
In impact, markets are shifting from a consumption-led restoration to at least one pushed by capital expenditure, infrastructure, and productiveness. If that shift holds, it may ripple past conventional equities and into areas like digital infrastructure, blockchain, and information monetization — domains the place crypto tasks have staked a declare.
Nonetheless, the financial institution sees turbulence forward. As buyers and policymakers develop a clearer image of how AI impacts inflation, labor markets, and provide chains, monetary markets may expertise sharp shifts. BofA warns that the continuing “Okay-shaped” restoration, the place some sectors soar whereas others lag, provides complexity to this outlook.
That disconnect may deepen if AI amplifies productiveness in tech and finance whereas leaving slower-moving sectors behind. The outcome: a two-speed economic system that’s tougher to handle with conventional instruments. For markets, it raises the chance of mispricing and sudden revaluations.
Rising markets could profit within the close to time period, particularly if the U.S. greenback weakens and oil costs keep low. BofA notes that these areas are more likely to see stronger efficiency in 2026, helped by international financial easing. For some creating nations that skipped legacy infrastructure in favor of digital programs, rising AI demand may create new openings for various applied sciences.
Nonetheless, the tone of the report is cautiously upbeat. With two Fed cuts projected in 2026 and monetary coverage nonetheless working sizzling, the financial backdrop stays supportive, at the very least for now.
In a yr the place copper costs are rising on the again of provide constraints and monetary growth, and S&P earnings are anticipated to develop 14% regardless of muted worth beneficial properties, the market appears primed for change. Whether or not AI turns into a productiveness engine or a supply of instability could possibly be one of many defining questions of the subsequent twelve months.
And in that debate, crypto — particularly in its extra infrastructure-focused kinds — could have a job to play, even when it’s not on the middle of the dialog but.
