Bank of America’s 2026 market outlook paints a picture of strong global growth driven by AI investment, but warns of potential for increased volatility as investors begin to grasp the full impact of technology on the economy.
The bank’s global research team expects U.S. GDP to grow by a higher-than-consensus 2.4% year-on-year by the end of 2026, driven by business investment, fiscal stimulus and recent interest rate cuts. China’s growth rate is also expected to exceed expectations, reaching 4.7% in 2026 and 4.5% in 2027.
But the most important force shaping bank forecasts is artificial intelligence.
The surge in AI spending is already boosting GDP, and BofA isn’t sensing a bubble yet. “We’re optimistic about the two most influential countries,” said Candice Browning, BofA’s global research director. “Concerns about an impending AI bubble are overblown,” the report said, adding that AI-related capital spending is expected to grow further next year, confirming what some economists believe could be a new investment cycle.
Bitcoin BTC$91,878.33 Miners will benefit from the AI boom in 2025 as the surge in demand for high-performance computing increases the value of infrastructure. Several publicly traded mining companies this year reported increased revenue not only from mining but also from leasing data center capacity to AI companies that require power-hungry GPUs.
IREN (IREN) is up 337.15% year-to-date while Cipher Mining (CIFR) is trading up almost 300%. TeraWulf (WULF) is up 190% over the same period. This rally comes even as Bitcoin has failed to break out convincingly this year, continuing to trade around $90,000.
In fact, the market is moving from a consumption-led recovery to a capital investment, infrastructure and productivity-led recovery. If this shift holds, it could spill over beyond traditional equities into areas such as digital infrastructure, blockchain, and data monetization, areas where cryptocurrency projects have staked their claim.
Still, the bank is expected to face turmoil in the future. Financial markets could experience rapid changes as investors and policymakers develop a clearer picture of how AI will impact inflation, labor markets, and supply chains. BofA warned that the outlook is further complicated by a continuing “K-shaped” recovery, with some sectors surging while others lag.
That disconnect could deepen as AI increases productivity in technology and finance, leaving slower-moving sectors behind. The result is a two-speed economy that is difficult to manage with traditional tools. For the market, it increases the risk of mispricing or sudden revaluation.
Emerging markets could benefit in the short term, especially if the US dollar remains weak and oil prices remain low. BofA notes that these regions are likely to perform well in 2026, benefiting from global monetary easing. For some developing countries that have skipped legacy infrastructure in favor of digital systems, the growing demand for AI could create new avenues for alternative technologies.
Still, the tone of the report is cautiously optimistic. The economic backdrop remains supportive, at least for now, as fiscal policy remains tight with the Fed planning two rate cuts in 2026.
In a year when copper prices are rising on the back of supply constraints and fiscal expansion, and S&P profits are expected to rise 14% despite slowing price increases, the market appears poised for change. Whether AI becomes a driver of productivity or a source of instability is likely to be one of the questions that will define the next 12 months.
And in that discussion, cryptocurrencies could play a role, especially in infrastructure-focused forms, even if they are not yet at the center of the discussion.
