JPMorgan Report: Buying Opportunities Emerge in the Upstream AI Supply Chain

Nov 10 – Investment strategy turns toward a tech rebound. Dubravko, JPMorgan's head of global markets strategy, recommends going long stocks that have performed strongly over the past 12 months and short stocks that have performed strongly over the past 3 months — effectively a bullish call on tech outperforming energy and defensive sectors. He believes attractive buying points have emerged in the upstream AI supply chain after concentrated selling; large cloud service providers have limited near-term upside, but over the medium term they are expected to benefit from tighter computing power supply, which brings improved pricing power, margins and cash flow. Lower-volatility stocks have become less attractive; if investors continue to allocate to them, healthcare is the top choice, followed by utilities and consumer staples. Consumer cyclicals remain weighed down by high oil prices, borrowing costs and housing shortages, but apparel, restaurants and retail are favored over the long term.