An AI bubble is no longer Wall Street’s biggest fear. This market risk just took its place.

Bank of America's latest global fund manager survey shows that a "disorderly rise" in bond yields has overtaken an AI bubble as the market's most-cited tail risk. The shift matters because it points to where professional investors see the more immediate threat: not stretched technology valuations, but the cost of money itself.

Bond yields set the discount rate applied to future corporate earnings, so a rapid, unorderly climb pressures equity valuations broadly, not just in AI-linked names. It can also tighten financial conditions, raise corporate refinancing costs, and unsettle credit markets. The concern is less about yields rising than about the pace and smoothness of the move — an orderly drift is manageable, a disorderly spike is not.

What to watch: the path of long-dated yields, the language from major central banks, and whether inflation data force a repricing of rate expectations. For now, the survey suggests sentiment has rotated from a technology-specific worry toward a macro one.