JPMorgan Warns of AI Semiconductor Rally vs. Mega-Cap Tech Selloff, Echoing 1999 Bubble Signals

According to JPMorgan Chief Technology Strategist Jason Hunter on July 2, U.S. stocks are exhibiting market divergence similar to the months before the 1999-2000 dot-com bubble burst. Semiconductor stocks surged 87% year-to-date, with the Roundhill Memory ETF jumping 141% since its April launch, while the Magnificent 7 ETF fell about 7% from its January peak, particularly affecting Microsoft and Meta, which are spending heavily on AI infrastructure.

Hunter noted the pattern mirrors 1999, when telecom equipment suppliers soared while carriers and internet companies plummeted due to excess capital spending. Meta, Microsoft, Amazon, and Alphabet are projected to spend a combined $725 billion on AI this year. JPMorgan emphasized this is not a definitive statement about an AI bubble burst but a historical warning for investors to monitor.