'Tentacles of the AI buildout' reaching every asset class, says J.P. Morgan's Gabriella Santos

Summary

Gabriella Santos argues the AI capex buildout is still accelerating and remains a major earnings driver, but the summer momentum unwind showed investors must manage crowding and leverage. She says old tech buckets like Mag-7 are fading, while semiconductors, hyperscalers, and software can do well together. Using J.P. Morgan's AI factor basket, she finds most assets are increasingly tied to AI, making true diversification scarce. The few uncorrelated areas she highlights are Treasuries, gold, core real estate, and European equities.

• NVIDIA and Dell led tech higher while software had its worst week in nearly three months, raising AI leadership questions.
• Gabriella Santos says AI remains a huge secular theme and the AI capex buildout phase is still accelerating.
• The summer momentum unwind showed even AI bulls need careful position sizing, leverage control, and diversification.
• Discrete buckets like Mag-7 are fading, but hyperscalers, semiconductors, and software can do well together.
• J.P. Morgan's AI factor basket shows most assets are increasingly moving with the AI buildout.
• Treasuries, gold, core real estate, and European equities are among the few return streams less tied to AI.