JPMorgan Chase CEO Jamie Dimon says the next credit downturn will likely catch investors off guard, not because losses rise, but because of where they show up.
In the Q&A portion of JPMorgan’s 2026 Company Update, Dimon says credit downturns always hit an unexpected industry and that even the legendary investor Warren Buffett was blindsided once.
“There’s always a surprise in a credit cycle. Even if a credit cycle is normal, so you have a recession [and] you have rising credit losses, the surprise has often been which industry. You didn’t expect newspapers in 2000, Warren Buffett’s businesses. You didn’t expect utilities and phone companies in 2008 and 2009.”
Dimon warns that the next credit collapse will likely strike an industry that’s already being beaten down because of AI. According to Dimon, JPMorgan Chase has data on software firms, hinting that some of these names might be overleveraged.
“And this time around, it might be software because of AI.
We’ve always talked about there are moving tectonic plates underneath and which industry would be challenged. You’d be shocked on software, loan by loan, name by name, customer by customer…
You gotta look at the credit cycle when it turns, and it will turn. That’s when people would be surprised more by what industry, what types of credits.”
The iShares Expanded Tech-Software Sector ETF (IGV), which tracks the performance of US-traded stocks from the software industry, has been pummeled as of late, down more than 33% since its peak in September.
Dimon appears to be suggesting that the worst is still to come for the software industry.
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