JPMorgan: AI stocks show similarities to 2000 tech peak

JPMorgan is telling clients the AI trade is starting to rhyme with the top of the dot-com bubble. Technical strategist Jason Hunter says the setup heading into September looks fragile, and the split under the surface of the AI complex is what has him worried.

What JPMorgan actually said

Jason Hunter, JPMorgan’s chief technical strategist, told clients the current divergence in AI stocks mirrors what happened in the months before the dot-com bubble burst in 2000, with the note published Aug. 21 as the S&P 500 sat just below its next resistance range of 7,909 to 7,935.

Hunter said the index remained above its support zone of 7,521 to 7,620 but flagged that conditions could deteriorate quickly heading into September. The read: indexes are still technically bullish, but the internals are cracking.

The divergence that has him worried

In a healthy rally, the companies buying the chips and the companies selling the chips tend to rise together. Hunter compared this to 1999, when communications equipment suppliers surged while companies making heavy capital investments crashed from peak valuations.

Today, chipmakers are ripping while the hyperscalers footing the bill are lagging. On the other side sit the hyperscalers, the tech giants spending billions to build AI. Meta is down about 5% year to date, while Microsoft has fallen 18% to 20% and posted its worst monthly decline since 2000, according to TradingView.

AI hardware stocks have been on a tear. The Philadelphia Semiconductor Index is up 87% this year and logged its best-ever quarter in Q2.

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Why the split matters

Chipmakers collect revenue the moment a tech giant places an order. Big spenders carry the risk. Hyperscalers must convert that hardware into software and cloud profits, which takes time. Proof is now the demand.

Concentration risk compounds it. When you buy an S&P 500 or Nasdaq fund, more of your money automatically goes into the largest stocks. So if these few names drop sharply, the whole fund drops with them, even if hundreds of other companies are doing fine. This played out in June 2026, when the Magnificent Seven lost roughly $2 trillion in market value over a few weeks and dragged the broader index down even as other stocks traded positively.

Not a crash call

He is not saying AI is fake. He is not saying the market is about to collapse. What he is saying is that a crowded investment theme showing this kind of internal fracture has historically been dangerous.

The rotation away from artificial intelligence names during June and July didn’t take place with conviction, he said. “The broadening and rotation isn’t like the 4Q25 occurrence, when the shift had a pronounced pro-cyclical theme. This time around, it seems to be an unrelated combination of position unwinds, attempts to rotate away from crowded Technology exposure and a shift into portions of the market that could be construed as defensive in nature,” he said.

Options market and stocks to watch

Watch for options flow to tell the story on both sides of the AI trade:

NVDA: The chipmaker at the center of the AI capex cycle. Watch for whether call flow keeps supporting the run in semis or if hedging picks up into September seasonality.

MSFT: A hyperscaler already showing the divergence Hunter is flagging. Watch for downside protection and put skew if the underperformance drags on.

META: Another hyperscaler carrying heavy AI capex. Watch for how the market prices its ability to convert that spend into monetization.

SMH: The semis ETF is the cleanest proxy for the hardware side of the split. Watch for flows here as a tell on whether the chip trade is still crowded.

SPY: With Hunter’s 7,521 to 7,620 support zone in play, watch for index-level hedging and any break of that range. More coverage on Unusual Whales news.

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