JPMorgan strategist Mislav Matejka says the recent weakness in semiconductor stocks should be used as a buying opportunity

“The risks of renewed flareups remain, but we believe one should keep using any dips on the back of adverse geopolitical headlines in order to add,” wrote Matejka.
The firm’s preferred tech positioning is "semis over hyperscalers over AI at risk plays," with JPMorgan adding that "the latest weakness in SOX and in Korea will be used as an opportunity to add, as semis upcycle is not peaking anytime soon, meaningful supply is not likely to arrive before 2028."
On the Magnificent Seven, JPMorgan is more cautious, saying the group is "likely to see derating continuing on monetization fears."
The firm also remains “fundamentally bearish on AI cannibalisation trades," including software, business services, and media, although it sees room for tactical bounces when those areas become oversold
At the broader market level, JPMorgan expects fresh highs in global equities in the second half, supported by strong earnings, easing inflation pressures, and lighter positioning. Matejka added that AI is "unlikely to be the only story in town in 2H," with small caps, cyclicals, and international markets expected to benefit from broader market participation