A senior JPMorgan credit executive says investors are missing a golden opportunity as the market has become too focused on dumping AI losers.
In a new Bloomberg interview, Sanjay Jhamna, JPMorgan Chase’s global head of credit trading, says periods of rapid productivity growth typically bring volatility as a new order emerges.
“Every time that you’ve got like a tremendous productivity boost, there will be some consolidation. And that’s what the market has been focused on, which are who are going to be the losers.”
But Jhamna notes that the more important story may be which companies rise to the top after the consolidation.
“What participants haven’t focused on as much, but will, is that there will also be big winners, those companies that harness the power of the new technology in order to gain share.”
He adds that software’s footprint in the economy is likely to expand, not contract.
“If I had to venture, the share of software in GDP will be, in five years, bigger, not smaller.”
Jhamna also says credit markets have remained relatively stable despite AI-driven volatility in equities.
“Markets have been very orderly. I think that credit investors understand that some amount of sectoral and company stress is just a normal part of a normal credit cycle.”
In his view, the stress is creating opportunity rather than signaling systemic risk.
“So, they’re looking at this as an immense opportunity to see dispersion and to see opportunities, as you say, to deploy capital at interesting levels.”
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