Financial institution of America’s 2026 market outlook paints an image of sturdy international development pushed by AI funding, however warns of potential for elevated volatility as buyers start to know the complete influence of know-how on the financial system.
The financial institution’s international analysis group expects U.S. GDP to develop by a higher-than-consensus 2.4% year-on-year by the top of 2026, pushed by enterprise funding, fiscal stimulus and up to date rate of interest cuts. China’s development price can also be anticipated to exceed expectations, reaching 4.7% in 2026 and 4.5% in 2027.
However an important power shaping financial institution forecasts is synthetic intelligence.
The surge in AI spending is already boosting GDP, and BofA is not sensing a bubble but. “We’re optimistic in regards to the two most influential international locations,” stated Candice Browning, BofA’s international analysis director. “Considerations about an impending AI bubble are overblown,” the report stated, including that AI-related capital spending is predicted to develop additional subsequent 12 months, confirming what some economists consider might be a brand new funding cycle.
Bitcoin BTC$91,878.33 Miners will profit from the AI increase in 2025 because the surge in demand for high-performance computing will increase the worth of infrastructure. A number of publicly traded mining corporations this 12 months reported elevated income not solely from mining but additionally from leasing knowledge heart capability to AI corporations that require power-hungry GPUs.
IREN (IREN) is up 337.15% year-to-date whereas Cipher Mining (CIFR) is buying and selling up virtually 300%. TeraWulf (WULF) is up 190% over the identical interval. This rally comes at the same time as Bitcoin has failed to interrupt out convincingly this 12 months, persevering with to commerce round $90,000.
In reality, the market is shifting from a consumption-led restoration to a capital funding, infrastructure and productivity-led restoration. If this shift holds, it may spill over past conventional equities into areas akin to digital infrastructure, blockchain, and knowledge monetization, areas the place cryptocurrency initiatives have staked their declare.
Nonetheless, the financial institution is predicted to face turmoil sooner or later. Monetary markets may expertise speedy modifications as buyers and policymakers develop a clearer image of how AI will influence inflation, labor markets, and provide chains. BofA warned that the outlook is additional sophisticated by a seamless “Okay-shaped” restoration, with some sectors surging whereas others lag.
That disconnect may deepen as AI will increase productiveness in know-how and finance, leaving slower-moving sectors behind. The result’s a two-speed financial system that’s tough to handle with conventional instruments. For the market, it will increase the danger of mispricing or sudden revaluation.
Rising markets may benefit within the brief time period, particularly if the US greenback stays weak and oil costs stay low. BofA notes that these areas are prone to carry out nicely in 2026, benefiting from international financial easing. For some creating international locations which have skipped legacy infrastructure in favor of digital programs, the rising demand for AI may create new avenues for different applied sciences.
Nonetheless, the tone of the report is cautiously optimistic. The financial backdrop stays supportive, not less than for now, as fiscal coverage stays tight with the Fed planning two price cuts in 2026.
In a 12 months when copper costs are rising on the again of provide constraints and monetary growth, and S&P earnings are anticipated to rise 14% regardless of slowing value will increase, the market seems poised for change. Whether or not AI turns into a driver of productiveness or a supply of instability is prone to be one of many questions that can outline the following 12 months.
And in that dialogue, cryptocurrencies may play a job, particularly in infrastructure-focused kinds, even when they don’t seem to be but on the heart of the dialogue.
