Bank of America says bonds may hedge AI selloffs
Bank of America’s derivatives team argues that the traditional inverse relationship between stocks and bonds may be reversing in the context of AI market risks. Following a recent drop in OpenAI’s revenue estimates, US Treasury yields fell alongside equities, breaking a 2026 pattern where AI anxiety typically pushed yields higher. BofA suggests that an AI-driven growth shock could compress both…
Key points
- OpenAI’s annualized net revenue was estimated at $50 billion, missing earlier $70 billion projections.
- BofA forecasts hyperscaler AI bond issuance between $140 billion and $300 billion annually for three years.
- BofA argues an AI growth shock could cause stocks and Treasury yields to fall together.
The shift follows OpenAI’s October 2026 revenue miss, where annualized net revenue was estimated at $50 billion against earlier projections of $70 billion. This $20 billion gap triggered a Nasdaq drop of over 1%, with significant declines in AI hardware stocks like Nvidia, AMD, and Oracle. BofA frames this as a demand shock, recommending investors hedge against the risk of simultaneous declines in stocks and bond yields.
The bond market’s relevance to AI is underscored by massive infrastructure spending. Hyperscalers issued $121 billion in corporate bonds in the year leading up to October 2026. BofA forecasts this borrowing could reach between $140 billion and $300 billion annually over the next three years, indicating that the AI buildout is increasingly a credit story as well as an equity one.
Bank of America sees bonds becoming the hedge against an AI selloff
cryptobriefing.com · 26 October 2026
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