# Bank of America says bonds may hedge AI selloffs

Digest AI · Business & Funding · published 2026-10-26T17:43:00Z

Canonical: https://digestai.news/story/bank-of-america-says-bonds-may-hedge-ai-selloffs

## Summary

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 asset classes simultaneously, making Treasuries a potential cushion rather than a casualty.

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.

## 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.

## Why it matters

This shifts portfolio strategy for AI investors. If AI busts lower both stocks and yields, bonds regain their role as a hedge, altering risk management for tech-heavy portfolios.

## Sources

1. [Bank of America sees bonds becoming the hedge against an AI selloff](https://cryptobriefing.com/bank-of-america-bonds-hedge-ai-selloff) (cryptobriefing.com, 2026-10-26)

## Cite

Digest AI, "Bank of America says bonds may hedge AI selloffs", 26 October 2026, https://digestai.news/story/bank-of-america-says-bonds-may-hedge-ai-selloffs

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