J.P. Morgan sees a pile of red flags in the AI market
j.p. morgan reports 42 ai companies drove 80% of s&p 500 gains since 2022, warning of extreme concentration risks and dotcom-bubble-style technical indicators.
a j.p. morgan analysis warns that only 42 ai companies have generated nearly 80% of the s&p 500's profits and revenue since chatgpt's 2022 launch, signaling extreme concentration risk. the report cites four indicators similar to the dotcom bubble: semiconductor stocks deviating sharply from 200-day moving averages, record hedge fund exposure to chips, korean margin lending tripling since 2020, and semiconductor options trading volume quintupling. additionally, the bank notes that nvidia's market share is projected to slip from 85% to 75% by 2026 as cloud providers adopt cheaper custom silicon like amazon trainium to offset rising ai compute costs.