JPMorgan: AI sector crowding is still high, and it’s not the right time to bottom-fish on model prompts

Deep Tide TechFlow update. According to trend research, a quantitative report from JPMorgan Chase on July 16 said that the Philadelphia Semiconductor Index has already dropped by about 19% from its June 22 high, but quantitative models indicate that the digestion of congestion in AI-related sectors has not been fully completed yet. The “AI bubble interest score” tracked by the model is still in the historical highest range; at this level, the probability of the SOX falling another more than 8% in the short term exceeds 50%.

JPMorgan provided a quantifiable entry signal: only when the score falls out of the historical highest range is it truly the time to begin considering scaling in. Before that, every rebound could be pulled back by panic-driven narratives. For US stock investors, this is not a time to add exposure; it is recommended to wait for the window in mid-August, or hedge with put options and defensive sectors. For A-share investors, volatility in the domestic AI sector is higher; the same logic can be applied—wait for a clearer “right-side” signal, with the August earnings period being the key window.