Bank of America fund manager survey delivers worrisome news for investors originally appeared on TheStreet.

There is a school of thought that stock market turning points happen when most investors are overly bullish or bearish.

Of course, it's challenging to judge exactly how bullish or bearish is \\"too\\" much, which is why the old Wall Street adage \\"stocks can remain irrational longer than you can remain solvent\\" is popular.

Still, the latest Bank of America Fund Manager Survey shows Wall Street pros may be getting a bit giddy, which may ring alarm bells for some investors who have been sitting on big profits since April's stock market low.

President Donald Trump's harsher-than-expected tariff announcements caused the S&P 500 to tank by 19% from mid-February's highs to its early April low, causing most sentiment measures to flash oversold.

Since President Trump paused most reciprocal tariffs in April, the rally has been largely a straight line higher, driven by hopes that trade deals would result in lower tariffs than originally proposed.

Related: Morgan Stanley revamps inflation forecast ahead of CPI data tomorrow

Since April 8's close, the S&P 500 and Nasdaq have surged 28% and 40%, respectively, and individual stocks, particularly those with ties to artificial intelligence or quantum computing, have put on an even bigger clinic.

For example, AI superstars Nvidia, which markets the chips and software for AI's heavy workloads, and Palantir, which sells a platform for developing AI apps, have climbed 95% and 150% from their springtime lows, respectively.

Meanwhile, Quantum Computing Corp, IonQ, and D-Wave Computing have skyrocketed 185%, 136%, and 201% from their April lows.

Stocks' largely unchecked climb poses a big problem for many investors who sold this spring but failed to buy back near April's lows, leaving them locked out of the market, awaiting a pullback to buy.

Perhaps Bank of America's latest survey of fund managers suggests such an opportunity may present itself soon.

Nobody rings a bell signaling the start or finish of a market move, forcing investors to parse various data for clues that a turn may be near.

One contrarian signal may be Bank of America's latest fund manager survey. The survey is conducted monthly, and 190 global fund managers shared their market thoughts in its August survey.

Related: Analyst expects gold to fall off the 'Wall of Worry'

The results show fund managers are \\"the most bullish FMS since Feb'25,\\" with \\"cash as % AUM [assets under management] at historically low 3.9%.\\"

Bank of America isn't convinced the reading is high enough yet to say \\"sell,\\" writing that results are \\"not a clear and obvious inflection point\\" and \\"equity allocations on rise but not at extreme levels.\\"

Still, fund managers appear to be positioned very bullishly, and that could mean less dry powder on the sidelines to fuel additional gains after an already massive move.

The survey shows bullishness coincides with an improving economic outlook and a friendly Fed interest rate policy.

\\"68% predict soft landing, 22% no landing, just 5% positioned for a hard landing,\\" wrote Bank of America analysts. \\"Asked if next Fed Chair resorts to QE/YCC [quantitative easing or the buying of Treasuries in the open market/yield curve control] to ease U.S. debt burden, 54% said yes, 36% no.\\"

The survey finds that money managers are the most overweight stocks since February, when stocks peaked before their tariff-driven selloff.

The most crowded trade is the Magnificent 7 stocks, which have risen to the most owned since March 2025 in the survey. Funds are also betting against the US Dollar and long gold.

The survey also tilts toward large-cap stocks relative to small-cap stocks.

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Overall, fund managers are a net 14% overweight, while cash is the most underweight since February, according to Bank of America.

In the past month, they've tilted from owning Europe to emerging markets stocks, lifting the emerging markets survey data to the highest since February 2023.

While cash is low and exposure to stocks is high, that doesn't necessarily mean U.S. stocks can't continue climbing.

Money could rotate from other regions if valuations or the U.S. economic outlook get less cloudy. Fund managers remain skeptical about the U.S. market, with exposure to the U.S. at a \\"net 16% underweight,\\" a six-month low.

\\"The U.S. is viewed as the region in which equities are the most overvalued by a record net 91% of FMS investors (up from 87% in July),\\" wrote Bank of America.

Overall, Bank of America's analysis reveals the following ideas for contrarian investors:

\\"Based on FMS positions, best August contrarian longs are US$, cash, REITs, healthcare, and best contrarian shorts are stocks, EM, banks, utilities.\\"

Related: Fed official sends dire warning on US economy

Bank of America fund manager survey delivers worrisome news for investors first appeared on TheStreet on Aug 11, 2025

This story was originally reported by TheStreet on Aug 11, 2025, where it first appeared.