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Global Desk AI stocks are still the market’s favorite. The stock market continues to love artificial intelligence (AI) related stocks, but some investors are starting to worry that this big rally might not last forever. Nvidia recently hit a $5 trillion market cap, while Apple and Microsoft both crossed $4 trillion this week, as stated by Business Insider. This massive growth is making some investors nervous about a possible pullback.Gold and China seen as safest AI hedgeBank of America’s Michael Hartnett shares a warning. Bank of America analyst Michael Hartnett said in a Friday note to clients that valuations of top US tech firms are now very high mainly because of AI growth. He suggests two safe bets — gold and Chinese stocks. Hartnett said gold and Chinese stocks are the best hedges if the AI momentum slows or the bubble bursts. He sees them as protection from big future losses. Hartnett believes investors are still excited and pouring money into stocks and crypto, showing they’re not afraid of risk yet. But he warns that booms and bubbles could still be forming. Lower rates and young traders are keeping markets hot. He said the expectation of lower interest rates and the active participation of young investors who love trading risk assets are helping markets stay strong for now. China stocks and gold could rise againAI stock buyers expect more easy money. According to Hartnett, many investors are still buying AI-related stocks because they think they’ll make easy profits by 2026 — but he doesn’t agree that this is a smart move. Hartnett said, "AI equity leadership ain't budging for time being and we like gold & China stocks (Chart 9) as best boom/bubble hedges", as per the report by Business Insider.Live EventsALSO READ: Why are Microsoft shares rising today, has OpenAI anything to do with it? Here's the latestBofA chart shows China’s potential upside. The first BofA chart shows that US investors are taking more risks, while Chinese stocks are still trading near their lows compared to bonds. This could mean China has more room to rise if investor confidence improves soon. Gold could bounce back after profit-taking. The second chart reveals that investors recently sold gold after months of strong gains and record highs earlier in October. BofA said such sharp outflows could be a “reset point”, possibly leading to a gold rebound once traders return. AI spending by tech giants keeps the bubble growing. Hartnett’s warning comes even as Google, Microsoft, Amazon, and Meta continue announcing huge AI spending plans for 2026 and beyond, which keeps pushing the hype higher. Michael Hartnett from Bank of America warns that the AI stock boom might not last forever. He believes gold and Chinese stocks are the best safety nets if the AI bubble pops, as investors continue to chase risky bets fueled by optimism, young traders, and hopes of lower interest rates.FAQsQ1. What are the safest investments if the AI stock bubble bursts?According to Bank of America analyst Michael Hartnett, gold and Chinese stocks are the safest hedges if the AI stock rally slows or crashes.Q2. Why does Bank of America warn about the AI stock bubble?BofA warns that tech valuations are too high due to AI hype, and investors should be careful as a market pullback could happen.Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) Read More News onAI stocksAI stock bubbleBank of AmericaMichael Hartnettgold investmentChinese stockssafe investmentsAI rallystock market warningAI stocks 2025 (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates....moreless (You can now subscribe to our Economic Times WhatsApp channel)Read More News onAI stocksAI stock bubbleBank of AmericaMichael Hartnettgold investmentChinese stockssafe investmentsAI rallystock market warningAI stocks 2025(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates....moreless
