JPMorgan Chase strategists, led by Mislav Matejka, are advising investors to re-engage with technology stocks, especially in the semiconductor sector. This recommendation comes after a recent pullback in global AI trading, which has made valuations more attractive for investors. The firm believes that sustained strong earnings performance and clear evidence of AI commercialization will drive renewed investor focus on the sector.
This positive outlook from JPMorgan aligns with a broader trend of capital flowing back into US tech stocks, even as some investors previously questioned the durability of AI spending and high valuations. During the third quarter of 2026, technology-focused US exchange-traded funds attracted $22 billion in inflows, significantly more than the $4.6 billion directed to all other sectors combined, according to Bloomberg Intelligence. Hedge funds have also increased their net-long Nasdaq 100 futures positions to the highest level since December, indicating a shift in sentiment.
The Nasdaq 100 reached a record high in late September, reversing an earlier decline that saw the index fall more than 10% below its peak. Major technology companies continue to increase capital expenditures on computing infrastructure, even though the commercial returns are still under scrutiny. This combination of strong corporate results, renewed positioning by investors, and capital reallocation has undermined arguments for a broad tech correction. Companies like Micron Technology saw a 5% rise, and Advanced Micro Devices briefly surpassed a $1 trillion market value after a 10% single-day gain, highlighting the strong performance of chipmakers and software stocks.
Despite the overall positive outlook, there was a brief period of uncertainty. The Nasdaq-100 index dropped 1.5% on September 14-15, erasing over $600 billion in market capitalization due to concerns about a slowdown in AI development. However, sentiment quickly reversed following the success of Meta's Muse AI assistant on September 21, which caused Meta's stock to jump 11% and propelled the broader semiconductor sector. This volatility underscores investor uncertainty regarding AI infrastructure investment returns and development timelines.
JPMorgan also maintains a bullish stance on equities overall through the end of the year, expecting further stock gains driven by strong profit margins, expanding earnings growth, and robust corporate balance sheets. While acknowledging near-term headwinds such as Brent crude surpassing $100 per barrel and rising Treasury yields, the strategists believe these will not derail the current rally. The firm recommends overweighting eurozone and emerging market equities, favoring mining, capital goods, and semiconductor sectors, while holding a bearish view on media and software.
