Fund Managers Overweight Tech Stocks by 37% as Consumer Discretionary Dips to 34% Underweight

Key Findings

Professional money managers have picked a side, and it is not the shopping mall. Bank of America’s October 2026 Global Fund Manager Survey shows a net 37% of fund managers are now overweight technology stocks. That is up from 30% in September and marks the heaviest tech exposure since August 2020. Meanwhile, consumer discretionary stocks are getting the cold shoulder at a level not seen since July 2008.

Inside the Numbers

The survey, released on October 13, polled 161 participants between October 2 and October 8, 2026. Together, those respondents manage $453 billion in assets. The headline figure is the jump in tech positioning. Going from a net 30% overweight to a net 37% in a single month is a meaningful shift for a group that usually moves like an ocean liner, not a jet ski. Tech is not the only sector getting love. Pharmaceuticals came in as the next most overweight sector at +23%, with industrials close behind at +22%. On the other end of the spectrum sits consumer discretionary. Managers reported a net 34% underweight there, the most bearish reading since July 2008.

Risks and Outlook

The survey also flagged rising concentration risk. Global semiconductor stocks were named the most crowded trade, with 45% of respondents pointing to them. The AI bubble debate Enthusiasm for tech does not mean managers are blind to the risks. The survey found fund managers split almost down the middle on whether an AI bubble will form in 2027. Some 45% of respondents expect one to emerge, while 42% do not.

An AI bubble also shows up as a notable tail risk, with 23% of respondents identifying it as such. Broader equity positioning has cooled somewhat. Net longs on stocks slipped to 44%. Cash holdings sit at 3.9%, below the 4% threshold that the survey treats as a sell signal. A net 47% of fund managers expect above-trend growth and inflation, the highest confidence level on that front since February 2022. Some 60% of fund managers still predict double-digit earnings growth over the coming year.

What This Means for Investors

The clearest read is that institutional money continues to bet on technology, particularly companies tied to AI advancement, with conviction growing heading into the final stretch of 2026. When 45% of managers identify semiconductors as the most crowded trade, it suggests a lot of capital is clustered in a narrow corner of the market. With cash below the 4% sell-signal level, investors may need to stay alert to the possibility of a correction, particularly given how heavily positioned managers are in tech. A 34% net underweight in consumer discretionary reflects deep skepticism toward companies that rely on discretionary spending. Key things to track in the coming months include whether tech positioning keeps climbing past 37%, whether cash levels stay below 4%, and whether the AI bubble camp grows beyond its current 45%.