David Lebovitz, Global Market Strategist at JPMorgan Asset Management, said investors are getting better at distinguishing AI's risks from its rewards as the technology becomes an "everywhere" trade that permeates investments broadly. He made the remarks on Bloomberg Television.
JPMorgan Asset Management · AI Outlook
"Everything Is an AI Trade" — Now the Question Is How You Play It
As AI becomes an "everywhere" theme touching every sector, investors are learning to separate areas of possible oversupply from durable demand — rather than buying related stocks indiscriminately.
$400B+
Hyperscaler capex, 2025
~$800B
Hyperscaler capex, 2026 (est.)
The Spending Curve: Hyperscaler Capex
AWS · Microsoft Azure · Google Cloud — annual capital expenditure, scaled to size
In the early stages, capital expenditure runs ahead — raising risks of inflationary pressure and valuation correction.
The Payoff: Productivity Is Accelerating
U.S. nonfarm productivity, year-over-year growth
2.8%
4 quarters to Q1 2026
AI and related tech are expected to add 1.4–2.7% to productivity per year in coming years.
The Bull Case
A "general-purpose technology" like the steam engine or computer
Theme spreads beyond chips into industrials, utilities, materials
AI "moving from hype to real execution" — could refuel a risk rally
The Caution
Delayed monetization and stretched valuation gaps
Many firms struggle to realize value from AI and scale it
Warning of a possible correction in AI valuations
The Playbook
Not a bubble — but the possibility of one forming can't be ruled out.
SELECTIVITY
Separate durable demand from possible oversupply
DIVERSIFICATION
Barbell: AI supply chain paired with cyclical stocks
STRUCTURAL VIEW
Treat AI as a long-term trend, balanced against overheating
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