Morgan Stanley: If AI companies' performance "blows up," market risks will far exceed geopolitical conflicts
JP Morgan Asset Management stated that disappointing earnings from artificial intelligence companies pose a greater risk to the tech-driven global stock market rally compared to ongoing geopolitical tensions. The company's global market strategist, Kree Craig, said, "The market's focus on artificial intelligence is so high that any disappointing situation could trigger a larger pullback." Strong demand for artificial intelligence and expectations of further interest rate cuts by the Federal Reserve have driven global stock markets to new highs, with the four major U.S. benchmark indices soaring to historic peaks. Craig believes that given the overvaluation of tech giants, any earnings setbacks could trigger sell-offs, as evidenced by the market crash in April. He pointed out that considering the massive investments by mega-cap companies, "if these investments fail to translate into revenue, the market may begin to reassess these companies' earnings growth prospects at current valuation levels." He believes that the upside potential for U.S. stocks at current levels is limited, while Europe may benefit from fiscal support. Japan may gain a boost from corporate reforms, and emerging markets stand out due to their valuation attractiveness
According to Zhitong Finance APP, JP Morgan Asset Management stated that disappointing earnings from artificial intelligence companies pose a greater risk to the tech-driven global stock market rally compared to ongoing geopolitical tensions.
The company's global market strategist, Kree Craig, said, "The market's focus on artificial intelligence is so high that any disappointing situation could trigger a larger pullback."
Strong demand for artificial intelligence and expectations of further interest rate cuts by the Federal Reserve have driven global stock markets to new highs, with the four major U.S. benchmark indices soaring to historical peaks. Craig believes that given the overvaluation of tech giants, any earnings setbacks could trigger sell-offs, as evidenced by the market crash in April.
Craig pointed out that considering the massive investments by mega-cap companies, "if these investments fail to translate into revenue, the market may begin to reassess these companies' earnings growth prospects at current valuation levels."
He believes that the upside potential for U.S. stocks at current levels is limited, while Europe may benefit from fiscal support. Japan may gain a boost from corporate reforms, and emerging markets stand out due to their valuation attractiveness
