Fears of an AI bubble are now seen as the biggest risk to financial markets – but investors are still piling in to stocks for fear of missing out – according to a closely-watched new survey.

The number of fund managers worried about a bubble – when share prices surge to unsustainably high levels – have tripled over the past month, the poll from Bank of America found.

It comes after the Bank of England last week sounded the alarm over the growing risk of a bubble in artificial intelligence (AI), saying that the risk of a ‘sharp market correction’ has increased and comparing the rally in the sector to the painful ‘dotcom’ bubble that burst 25 years ago.

Tech stocks in the US have surged, lifting Wall Street stock markets to record highs, on bets that AI will transform the economy and wider society.

But sceptics worry that investors have failed to price in the risk that the technology fails to live up to its promise or is hit by potential obstacles such as chip shortages.

A crash in AI stocks could send shockwaves across the globe – hitting the UK stock market, among others, and see lending seize up.

Tech stocks in the US have surged, lifting Wall Street market to record highs, on bets that AI will transform the economy and wider society

The latest BoA survey showed 33 per cent of global investors see an AI stock bubble as the biggest risk for markets, up from 11 per cent last month.

Yet that was not enough to dampen optimism about stocks, the poll found, amid hopes for robust economic growth.

It noted: ‘FOMO is on the rise, with the share of respondents worried about reducing equity exposure by too much, thereby missing out on a rally, up to 36pc.

‘Concerns around an AI bubble have increased, rising to the number 1 market tail risk, but not by enough to dampen a more positive equity market outlook overall.’

Jamie Dimon, the boss of JP Morgan and the world’s most powerful banker, is among those to have sounded the alarm, saying last week that he was ‘far more worried than others’ about the risk.

Dimon has now reiterated his concerns, listing ‘elevated asset prices’ alongside uncertainties such as tariff and inflation as he unveiled the bank’s latest quarterly results.

And this week, Bank of England governor Andrew Bailey warned of the risk of ‘disorderly adjustment’ if asset prices fall from recent highs.

Meanwhile, markets have wobbled in recent days as Donald Trump threatens to impose steep new tariffs on China though later seemed to pull back.

US Treasury Secretary Scott Bessent has since turned up the heat again, criticising export controls being imposed by China on key raw materials by and telling the FT it was a sign of China’s weakness and that ‘they want to pull everybody else down with them’.

Victoria Scholar, head of investment at Interactive Investor, said that the fear of an AI bubble among many investors had not translated into market positioning.

‘Instead, investors continue to pile into equities, chasing riskier returns, suggesting that even though many believe that tech stocks are overvalued, there’s a simultaneous belief that there could be more room to run,’ Scholar said.

‘As we’ve seen in history, stocks can remain in overbought or overvalued territory for months or even years before a correction or crash.’

But Matt Britzman, senior equity analyst at Hargreaves Lansdown, played down fears of a repeat of the dotcom crash.

‘Valuations today do not resemble 1999 – earnings are coming through, and the companies funding this buildout are cash-generating giants with mammoth war chests on their balance sheets,’ he said.

‘Pullbacks are inevitable, but the market is far from the top; the potential of AI is only beginning to be realised.’

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