Bank of America’s market outlook for 2026 paints a picture of strong global growth, led by AI investment, but warns that volatility could increase as investors begin to understand the technology’s full impact on the economy.
The bank’s global research team expects US GDP to grow by 2.4% year-on-year by the end of 2026, above consensus, driven by business investment, fiscal stimulus and recent interest rate cuts. China’s growth is also expected to beat expectations, with forecasts of 4.7% for 2026 and 4.5% in 2027.
But the most important force shaping the bank’s forecast is artificial intelligence.
The surge in AI spending is already lifting GDP, and BofA doesn’t see a bubble — yet. “We are optimistic about the two most influential economies,” said Candace Browning, head of BofA global research. “Worries of an impending AI bubble are overstated.” According to the report, AI-related capital investment is poised to expand further next year, supporting what some economists believe could be a new investment cycle.
Bitcoin miners have benefited from the AI boom of 2025 as increasing demand for high-performance computing has driven up the value of their infrastructure. Several publicly traded mining companies reported increased earnings this year, not just from mining, but from leasing data center capacity to AI companies in need of power-hungry GPUs.
IREN (IREN) is up 337.15% year-to-date, while Cipher Mining (CIFR) is trading nearly 300% higher. TeraWulf (WULF) is up 190% over the same period. The gains, which come even though bitcoin has failed to break out convincingly this year and continues to trade around the $90,000 area.
Indeed, markets are shifting from a consumption-led recovery to one driven by capital spending, infrastructure and productivity. If that shift sticks, it could ripple beyond traditional stocks and into areas like digital infrastructure, blockchain and data monetization — domains where crypto projects have staked a claim.
Still, the bank sees turbulence ahead. As investors and policymakers develop a clearer picture of how artificial intelligence affects inflation, labor markets and supply chains, financial markets could experience sharp shifts. BofA warns that the ongoing “K-shaped” recovery, in which some sectors are rising while others are lagging, adds complexity to this outlook.
This disruption could deepen if AI boosts productivity in technology and finance while leaving behind slower-moving sectors. The result: a two-speed economy that is harder to manage with traditional tools. For markets, it increases the risk of mispricing and sudden revaluations.
Emerging markets could benefit in the short term, especially if the US dollar weakens and oil prices remain low. BofA notes that these regions are likely to see stronger results in 2026, helped by global monetary easing. For some developing countries that skipped legacy infrastructure in favor of digital systems, growing AI demand could create new openings for alternative technologies.
Still, the tone of the report is cautiously optimistic. With two Fed cuts in 2026 and fiscal policy still running hot, the economic backdrop remains supportive, at least for now.
In a year where copper prices are rising on the back of supply constraints and fiscal expansion, and S&P earnings are expected to grow 14% despite muted price gains, the market seems poised for change. Whether artificial intelligence becomes an engine of productivity or a source of instability may be one of the defining questions of the next twelve months.
And in that debate, crypto — especially in its more infrastructure-focused forms — may have a role to play, even if it’s not at the center of the conversation yet.
