J.P. Morgan analysts suggest that the global artificial intelligence market has the potential to recover its strength after the recent decline in the sector's stocks. For the bank, this retraction has resulted in better positioning for investors and made valuations more attractive.
The institution identifies notable opportunities, especially in the semiconductor segment. Even in the face of concerns regarding AI implementation costs and the time required for these investments to generate returns, analysts predict that capital injections will remain robust, driven by advancements in monetization and corporate results from the technology.
Although AI-related stocks started the year on an upward trend, they lost momentum due to uncertainties about capital expenditures and the recovery period for these investments. At the beginning of this month, the sector's titles also suffered declines following warnings issued by executives of AI companies about the inherent risks of rapid technological development.
Mislav Matejka, Global Equities Strategist at J.P. Morgan, commented that the market correction has made valuations more inviting and could reignite interest in the sector. He stated that although the technology may not reach previous peaks of success, the fundamentals remain solid and there are numerous opportunities within the AI ecosystem.
The outlook is particularly positive for semiconductors. J.P. Morgan points to healthy fundamentals, projected price growth until 2027, and constrained supply and demand conditions that may persist until 2028.
Regarding software companies, the assessment is more cautious. J.P. Morgan perceives greater long-term instability, especially due to increased competition generated by AI progress. However, the analyst does not advise avoiding the software segment in isolation, given the significant reduction in valuations; he suggests that the trading pair between semiconductors and software should be reestablished.
This performance disparity between segments illustrates the current scenario: the MSCI World Semiconductors and Semiconductor Equipment index registered a gain of approximately 48% over the year, while the MSCI World Software and Services advanced only 1.3%. For J.P. Morgan, the combination of strong results, lower valuations, and lower volatility may favor a resurgence of investor interest in the global AI market.
