The AI trade is splitting in two, and JPMorgan thinks the next few weeks will determine whether that’s a healthy rotation or the early rumblings of something uglier.
JPMorgan strategist Jason Hunter flagged a growing divergence between AI chip and infrastructure stocks and the hyperscalers pouring hundreds of billions into AI buildout. The Philadelphia Semiconductor Index has surged 87% year-to-date through early July 2026. Meanwhile, Meta is down 5% and Microsoft is down 18% over the same period, with Microsoft posting its worst monthly loss since the year 2000 in June.
The dot-com echo nobody wants to hear
Hunter’s note draws a pointed comparison to the late 1990s, when hardware and infrastructure companies ran hot while the companies spending on that infrastructure started wobbling.
Today’s version features four hyperscalers, Meta, Microsoft, Amazon, and Alphabet, projected to spend a combined $725 billion on AI-related capital expenditures in 2026. JPMorgan separately estimated that five major hyperscalers would collectively spend around $697 billion.
What JPMorgan is watching this summer
Hunter’s note urged market participants to pay close attention to individual hyperscaler performance charts over the summer months. The thesis is straightforward. If Meta, Microsoft, Amazon, and Alphabet can stabilize and show signs of recovery before autumn, the broader market probably holds together.
Morgan Stanley offered a slightly more optimistic read in early July 2026, suggesting that a sector rotation from semiconductor momentum toward hyperscalers might already be underway.
Why crypto traders should care about an AI stock divergence
JPMorgan’s analysis didn’t mention crypto or blockchain at all. But the downstream effects of a potential AI stock correction matter enormously for digital asset markets.
For crypto investors specifically, the next few weeks of hyperscaler earnings guidance will be worth monitoring closely. Morgan Stanley’s suggestion that rotation toward hyperscalers is beginning could actually be the more important signal. Rotation implies the market is still functioning normally, just shifting preferences within the AI theme.