JPMorgan's Sundar Says AI Trade Entering Digestion Phase

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Sitara Sundar, head of alternative investment strategy at JPMorgan Private Bank, said the artificial intelligence trade is in a digestion period and warned of near-term volatility, while maintaining a constructive long-term view on the industry. Speaking on Bloomberg Television, Sundar said the market is trying to price two trades at once: an AI financing and infrastructure buildout that has already absorbed trillions of dollars and is in its middle innings, and the later-stage integration of AI into companies and sectors outside technology, which remains in its early innings. She said JPMorgan Private Bank would lean more into the integration and application layer of artificial intelligence, adding that spending in that area is not going to go down. Sundar said some data centers and financing activity are still being issued at 8%, 9% and 10% rates, and that spreads on hyperscaler issuance in investment grade have already started to widen, though she believes there is still room to go. She also said the biggest risk on the table outside of AI-related issuance is inflation, arguing core fixed income will not protect against it and pointing to real assets and infrastructure as areas where investors remain underallocated.

Impact on stocks 1

Digital Finance & Tokenization▲ · 1 stocks
JPMorgan Chase & Co
JPM
± Mixedrelevance

JPMorgan strategist comments on AI trade digestion and inflation risk; no company-specific development for JPMorgan Chase.

Theme Impact 4

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