Tech equities are on track for a landmark year: Bank of America’s weekly flow data indicates that 2025 could see a record $75 billion tumbling into the sector. That comes even as valuation concerns have crept back in, raising questions about just how much conviction investors have and what that means for risk.

Sustained Demand Despite Valuation Headwinds

According to BofA’s flow-show note, technology stocks remain remarkably popular, with year-to-date inflows tracking toward a historic high. The Nasdaq Composite, a key tech benchmark, surged around 14% this year, even touching an all-time high in late October. Yet volatility is creeping in — the index slipped by about 2% on a recent Thursday, evidence that investor excitement is being tested.

But even as valuations raise eyebrows, investors poured $4.4 billion into tech in a single week, according to BofA’s data. The message: there’s real, tangible conviction underneath the rally — not just speculative froth. This flow underscores how deep-seated the bullish sentiment remains, even in a more cautious market environment.

Broader Fund Flow Backdrop: Risk Assets and Treasuries

BofA’s report doesn’t just paint a rosy picture for tech — it also highlights significant fund rotations out of other risk assets. Crypto funds saw outflows of $2.2 billion in the same week, marking one of the largest exits on record. Investors appear to be stepping away from highly speculative plays, putting a renewed premium on stability. Simultaneously, U.S. Treasuries attracted $8.8 billion, their biggest weekly inflow since April, highlighting a cautious flight into safer corners of the market.

This dynamic — strong flows into tech, outflows in crypto, and a move into bonds — suggests that while investors are still chasing growth, they’re hedging against potential macro or valuation risks. It’s not so much a runaway tech frenzy as it is a selective, conviction-driven allocation.

What’s Driving This Conviction in Tech?

Several strategic and macro factors help explain BofA’s upbeat view on tech flows. For one, the prospect of continued AI capital expenditure remains a major tailwind. BofA analysts have previously highlighted that hyperscalers and enterprise access to AI infrastructure should sustain elevated capex, fueling long-term demand for compute.

At the same time, large-cap tech names — especially those with strong cloud, data-center, or AI exposure — remain central to investor allocations. The concentration risk may be real, but many investors see these companies as critical engines in the modern economy.

Finally, with some risk capital now pulling out of high-volatility crypto, tech equities may be benefiting from a repositioning — not just as high-growth plays, but as relatively scalable, cash-flow generating assets.

Looking ahead, the key will be whether these inflows can be sustained. Investors will be closely watching BofA and other flow trackers for signs of tapering conviction, especially if macro risks (such as rising interest rates or geopolitical tensions) intensify. At the same time, how much of the inflow is driven by long-term AI structural bets versus short-term momentum will matter for how resilient the tech rally can remain. If the $75 billion bet pays off, tech could continue to reshape capital markets — but if the flows falter, it may expose how much of the rally was underpinned by era-defining optimism.