Name: AI Trade Is in 'Digestion' Phase, JPMorgan's Sundar Says
Uploaded: 2026-09-15T13:49:12+00:00
Duration: 224 s

Speakers

Sitara Sundar — Global Investment Specialist, J.P. Morgan Private Bank

Summary

Sitara Sundar of JPMorgan Private Bank says the AI trade is in a near-term digestion phase with volatility, but she remains constructive long term. She sees two AI trades: the ongoing infrastructure and CapEx buildout, and the later integration and application layer where she would lean in. She also warns hyperscaler and AI CapEx-related investment-grade credit spreads may widen further, and favors real assets, infrastructure, and transport as inflation hedges over core fixed income.

AI trade described as in a digestion phase with near-term volatility but long-term constructive.
Two AI trades cited: infrastructure/CapEx buildout and application/integration into non-tech sectors.
Speaker favors leaning into the AI integration and application layer.
Cybersecurity and data security seen as likely moat around AI models.
Hyperscaler and CapEx-related investment-grade credit spreads have widened and may have more room to widen.
Core fixed income may not hedge inflation; real assets, infrastructure, and transport are favored.
Investors remain underallocated to real assets and infrastructure despite AI infrastructure hype.

Ideas

Sitara Sundar Global Investment Specialist, J.P. Morgan Private Bank 0:08

AI infrastructure spending remains resilient and mid-innings.

The speaker says the economy is still compute-constrained and mid-innings in a multi-trillion-dollar AI financing and infrastructure buildout. Spending on data centers, power, and chips should not go down; it would take significantly higher rates to stop it, and debt is still being issued even at 8-10% rates. Near-term digestion may cause volatility, but the long-term spending backdrop remains supportive.

Sitara Sundar Global Investment Specialist, J.P. Morgan Private Bank 0:54

Long-term constructive despite near-term AI digestion.

The market is pricing two AI trades at once: an ongoing AI financing and infrastructure buildout and the later integration of AI into non-tech companies and sectors. The speaker sees the AI trade in a near-term digestion phase with expected volatility, but remains constructive on AI over the long run.

Sitara Sundar Global Investment Specialist, J.P. Morgan Private Bank 0:56

Lean into AI application and integration layer.

The second AI trade is integrating AI into companies and sectors outside technology, which is still early innings. The speaker would lean more into the AI integration and application layer because spending there should not decline, and the durable moat is likely in the system built around models rather than individual frontier models.

Sitara Sundar Global Investment Specialist, J.P. Morgan Private Bank 1:45

Cybersecurity is likely AI's durable moat.

In prior tech cycles like cloud and mobile, the winner was not just the individual model but the system built around it. Cybersecurity and ensuring data security and proprietary data sets are built around AI models is likely where the moat will be, supporting the cybersecurity area.

Sitara Sundar Global Investment Specialist, J.P. Morgan Private Bank 2:36

Hyperscaler IG credit spreads may widen further.

AI and data-center financing is being issued even at 8-10% rates, and spreads on hyperscaler and CapEx-related investment-grade issuance have already started to widen. The speaker thinks there is still room for those spreads to widen further.

Sitara Sundar Global Investment Specialist, J.P. Morgan Private Bank 3:30

Real assets hedge inflation; investors underallocated.

The biggest risk outside AI-related issuance is inflation, and core fixed income will not protect against that. Real assets, infrastructure, and transport assets should come into play as inflation hedges, and investors remain underallocated to them despite the hype around AI infrastructure.

AI Trade Is in 'Digestion' Phase, JPMorgan's Sundar Says

Summary

Ideas

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