A top strategist at Bank of America says the AI boom reshaping markets isn’t speculative, noting that it’s still early, and its economic impact is just beginning to ripple through.
In a new Fox Business interview, Merrill and Bank of America Private Bank Chief Investment Officer Chris Hyzy says artificial intelligence has entered the efficiency phase, driving a powerful wave of capital spending that continues to lift growth across the economy.
“The three components of the GDP, nominal GDP growth over the next few years, you have to put this consumer right in the center, like we usually do. Housing is not additive right now overall to the GDP equation, but the AI CapEx is, and we’re seeing enormous CapEx boom.”
Earlier this week, crypto and AI czar David Sacks said artificial intelligence is responsible for 40% of US GDP growth.
Hyzy also says the current expansion remains far from over, describing AI capital expenditure as a structural driver, not a mania.
“It’s very early. Is it the first inning? Probably not. Is it the seventh? We don’t think so. You want to call it the fourth inning or something like that? The first wave of this is not a bubble. The first wave is efficiency, productivity. And then we’re seeing that flow through the economy. And we’re now starting to see full democratization of AI. That’ll happen over the next couple of years. And then you monetize it. So bubble is probably not the right word.”
Hyzy adds that the next phase will involve demand pull-through, as adoption spreads from large technology firms to broader industries.
Turning to the broader stock market, the BofA executive says he’s keeping an eye on one sector that investors are underestimating amid the AI trade, noting that it remains fundamentally solid yet underowned.
“The investment community is not willing to commit new dollars over and above what we’ve already seen to the healthcare segment. But they’re attractively valued. It’s a very disparate sector though. You’ve got medical sciences, life sciences, medical technology, drugs, biotechs, etc. So you have to pick your spots in there, but they have been acting better.”
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