Investors rattled by AI-driven volatility in US tech stocks are eyeing European government bonds as a safe haven, according to ING Groep NV. The Dutch banking giant suggests that swings in AI-related equities are pushing capital toward the relative stability of sovereign debt markets. This shift reflects growing unease about the tech sector's susceptibility to rapid technological changes and valuation corrections.

European bonds have historically served as a defensive asset class during market turbulence, offering predictable returns when growth stocks face headwinds. The current AI boom-bust cycle has intensified this dynamic, with investors seeking instruments less exposed to the sector's inherent volatility. Government bonds provide a counterbalance to the speculative nature of AI investments.

ING's analysis points to a broader reallocation trend as market participants reassess risk exposure. The recommendation comes amid heightened scrutiny of AI valuations and concerns about the sustainability of recent tech gains. For institutional investors managing large portfolios, the move toward European bonds represents a tactical adjustment to navigate the current market environment.