JP Morgan: If AI companies' performance "blows up", market risk will far exceed geopolitical conflicts.

J.P. Morgan Asset Management said that disappointing profits from artificial intelligence companies pose a greater risk to the tech-driven global stock market rally than ongoing geopolitical tensions. The company's global market strategist, Krieger, said, "The market's focus on artificial intelligence is so high that any disappointment could trigger a more significant pullback." Strong demand for artificial intelligence and expectations of further interest rate cuts by the Federal Reserve have pushed global stock markets to new highs, with the four major U.S. benchmark indices simultaneously hitting historical highs. Krieger believes that given the overvaluation of tech giants, any profit setback could trigger selling, as was evident in the market crash in April. Krieger pointed out that considering the massive investments by mega-corporations, "If these investments do not income, the market may start to re-examine these companies' profit growth prospects at their current valuation levels." He believes that the upside for U.S. stocks at their current levels is limited, while Europe may benefit from fiscal support. Japan may receive a boost from corporate reform, while emerging markets stand out for their attractive valuations.