J.P. Morgan sees a pile of red flags in the AI market

J.P. Morgan warns that there are "signs of investor exuberance" in AI markets. Just 42 AI companies in the S&P 500 account for 65 to 80 percent of the index's total profits. The semiconductor rally is flashing technical patterns last seen during the dotcom bubble, and leveraged chip ETFs have quintupled their market influence since early 2024. The bank sees multiple layers of concentration risk across markets, infrastructure, and the economy.