Signals & Noise: AI Exposure, Less Volatility? Enter Converts

Artificial intelligence has created huge opportunities for investors, but also significant volatility. In this episode of Signals & Noise, Michael Youngworth, Head of Global Convertible & Preferred Strategy at BofA Securities, explains why convertible bonds may offer a compelling way to participate in the AI theme without taking on the full volatility of common stocks. Youngworth breaks down how convertibles work, why they have become a key source of financing for AI infrastructure, data centers and hyperscalers, and how roughly one-third of the convertible market is now linked to the AI trade. He also discusses the asset class's unique combination of equity participation, downside support and embedded volatility exposure, as well as why recent market weakness has created a more attractive entry point. For investors who believe in the long-term AI buildout but are concerned about valuations, timing and drawdowns, convertibles may offer a different way to stay invested while potentially smoothing the ride.   "Bank of America" and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2026 Bank of America Corporation. All rights reserved.