A JPMorgan strategist says the artificial intelligence boom is entering a new phase, one where markets begin separating winners from losers rather than rewarding everything tied to the theme.
In a new CNBC interview, Jordan Jackson, global market strategist at JPMorgan Asset Management, says the AI rally is shifting away from broad-based gains and toward a period of differentiation that could shape market outcomes into 2026.
“I think the AI theme has gone from being just this indiscriminate rally where everyone benefits to this period of deciphering the winners and the losers. I think you will start to see more differentiation.”
Jackson says the shift matters for the broader market because a handful of large AI-linked companies now carry significant weight in major indexes, meaning their individual performance could increasingly determine overall market direction.
“Given the size of these names in the index, depending on the moves that some of these companies make, that could challenge the index more broadly to move higher over the course of next year.”
But Jackson says JPMorgan remains generally constructive on markets, even after three consecutive years of double-digit returns.
“I don’t think it changes the broader narrative that we’re still generally bullish, optimistic on the markets for next year. Does next year look like another 20% return on the market? Maybe not, but perhaps somewhere in the high single, low double digits.”
Jackson said part of the market rallies could come from areas outside of technology, particularly cyclical value sectors that may provide durability as leadership broadens.
“We are expecting to see some cyclical value areas of the market, potentially providing some durability for a market rally over the course of next year. So we like financials. We like industrials. We like materials.”
Energy, he says, is a “wild card” due to volatility tied to oil prices.
Looking further out, Jackson says the macro backdrop heading into 2026 could reinforce market rotation.
“We’ve gone from a deeply negatively sloped curve to a positive sloped one. And I think we’re going to see the curve continue to steepen out over the course of next year. And that’s generally been an environment that’s been pretty supportive for a cyclical, value-oriented sector. As they also think about the implications of the One Big, Beautiful Bill, being able to expense domestic R&D, I think we’re going to get a little bit more of a traditional CapEx spending on equipment and structures alongside, obviously, continued very strong numbers on the AI spending side.”
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