JPMorgan's Global Research Chair Joyce Chang asserts that the Artificial Intelligence (AI) capital expenditure (capex) beneficiary story remains robust, emphasizing that tech giants like Microsoft, Google, Amazon, and Meta have no choice but to continue their substantial investments in infrastructure, semiconductors, and data centers. She views AI as a new "arms race" where failing to invest could lead to a loss of market leadership. Despite concerns about the return on investment, Chang notes that retail investor flows indicate a persistent "buy the dips" sentiment, signifying strong long-term confidence in the technology.
Kevin Brunner, JPMorgan Chase's global chair of investment banking and mergers and acquisitions, concurs, stating that the AI sector has moved past the era of mere hype and is now firmly in a phase of real execution and scaling. He highlighted that every client is actively evaluating their AI strategy, and independent research supports this shift, with CB Insights reporting a 90% jump in AI-related mergers and acquisitions in Q1 2026 compared to the previous year. This transition means execution risk is replacing speculation risk as the primary concern for investors, who will increasingly scrutinize measurable AI productivity gains.
JPMorgan Asset Management's 2026 Investment Outlook also acknowledges the positive impact of the capex boom on recipients, noting that estimates for 2026 capex for five major US companies now stand at a remarkable $697 billion, an increase of $3 billion since the beginning of the year. While acknowledging that it's still too early to definitively assess the return on investment for hyperscalers, the firm suggests a selective approach to investments given the uncertainty about who the ultimate winners will be. Meanwhile, Dan Farley of State Street Investment Management believes the AI rally still has room to go, despite a recent tech-led rout and subsequent fresh selling hitting the sector.
