A new August 2026 Bank of America survey shows 64% of Asian fund managers now require concrete evidence of AI earnings before buying more tech shares. Investors are rotating money into defensive sectors like banks and utilities, as concerns about an 'AI bubble' grow amid recent market volatility.
The blind optimism surrounding artificial intelligence in Asian markets is cooling. According to the latest Bank of America Asia Fund Manager Survey for August 2026, institutional investors are moving away from speculative buying and are now demanding concrete evidence that AI technology is actually generating revenue.
The Shift from Speculation to Earnings
For many months, investors were willing to buy tech stocks based on the promise of future growth. Now, that sentiment has shifted significantly. The survey reports that 64% of managers will only increase their tech holdings if a company can show tangible proof of AI monetization—meaning the technology is already helping the company make real money. This suggests that the 'growth at any price' strategy is being replaced by a focus on actual financial results.
Investors Pivot to Defensive Sectors
As concern over the technology sector grows, fund managers are actively protecting their portfolios. Approximately 59% of those surveyed are hedging their bets against a potential drop in AI stock prices, more than double the number seen in July.
To balance this risk, capital is rotating into more stable, cash-generating industries. Investors are moving money into retail, e-commerce, banking, energy, and utility sectors. These sectors are favored because they typically offer more predictable cash flows compared to the high-risk, high-reward nature of pure AI infrastructure plays. This rotation reflects a broader desire to avoid the volatility that often accompanies speculative tech surges.
Market Volatility and Risk
This caution comes after a difficult period for tech investors. In July 2026, the Philadelphia Semiconductor Index, a key benchmark for the chip industry, fell by approximately 21%. This sharp decline forced many managers to reconsider their exposure. The survey reveals that about 32% of global investors now view the potential 'AI bubble' as a major risk to the market.
Despite this defensive stance, it does not mean institutional investors are abandoning the AI theme entirely. A majority (59%) of managers still believe that the long-term benefits of AI are only partially reflected in current stock prices. The sentiment is not that AI is failing, but rather that the market is becoming much more selective about which companies will actually thrive as the technology matures.
What Investors Should Monitor
The key takeaway for market participants is the changing criteria for success. The market is no longer satisfied with general promises about AI capabilities. The next phase of stock performance will likely depend on companies providing clear data on how AI is cutting costs or driving new revenue streams. Investors should track quarterly earnings reports for specific mentions of AI-driven profit margins, as this will likely be the primary metric driving professional investment decisions in the coming months.