AI to Continue Leading Growth

Bank of America’s 2026 market outlook paints a picture of strong global growth, led by AI investment, but warns that volatility could rise as investors begin to grasp the full impact of the technology on the economy.

The bank’s global research team expects U.S. GDP to grow 2.4% year-over-year by the end of 2026, above consensus, driven by business investment, fiscal stimulus, and recent rate cuts. China’s growth is also projected to beat expectations, with forecasts at 4.7% for 2026 and 4.5% in 2027.

But the most significant 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 on the two most influential economies,” said Candace Browning, head of BofA global research. “Concerns about an imminent 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 become a new investment cycle.

Bitcoin BTC$91,949.15 miners have benefited from the AI boom in 2025, as surging demand for high-performance computing has driven up the value of their infrastructure. Several publicly traded mining firms reported increased revenue this year not just from mining, but from leasing out 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 as come even as bitcoin has failed to convincingly break out this year, continuing to trade around the $90,000 area.

In effect, markets are shifting from a consumption-led recovery to one driven by capital expenditure, infrastructure, and productivity. If that shift holds, it could ripple beyond traditional equities 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 AI affects inflation, labor markets, and supply chains, financial markets could experience sharp shifts. BofA warns that the ongoing “K-shaped” recovery, where some sectors soar while others lag, adds complexity to this outlook.

That disconnect could deepen if AI amplifies productivity in tech and finance while leaving slower-moving sectors behind. The result: a two-speed economy that’s harder to manage with traditional tools. For markets, it raises the risk of mispricing and sudden revaluations.

Emerging markets may benefit in the near term, especially if the U.S. dollar weakens and oil prices stay low. BofA notes that these regions are likely to see stronger performance 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 upbeat. With two Fed cuts projected 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 primed for change. Whether AI becomes a productivity engine or a source of instability could 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.