JPMorgan Asset Management Sees Extended Tech Upside via AI Supply Chain

Summary

• JPMorgan Asset Management highlights continued upside in tech driven by AI data center supply chain.
• Hyperscaler AI capital expenditure is projected to consume 93% of cash flow from operations by 2026.
• BOJ monetary policy stability and 3.3 percent global growth support institutional shifts toward tech stocks outlook.

Hyperscalers will pour far more cash into AI infrastructure than they did just a few years ago. Spending jumps from 33 percent of operating cash flow in 2023 to 93 percent by 2026. That jump already forces big tech platforms to rethink every allocation decision, and asset managers are repositioning right along with them.

The setup looks favorable on the surface. Steady Bank of Japan policy plus rising AI capex lines up a clear path for tech stocks to keep climbing. June 2026 sits right where those two trends meet.

Macro Backdrop from BOJ and Global Forecasts

The Bank of Japan has kept its policy unchanged through mid-2026. Markets read that as ongoing support rather than any hint of tightening. The IMF backs the same picture with its 3.3 percent global growth forecast for the year, a modest upward revision from last October.

Steady Japanese rates remove one layer of outside noise from risk assets. Tech stocks, which price off future earnings, gain breathing room when borrowing conditions stay predictable. The IMF baseline keeps overall revenue expectations steady even while one sector races ahead.

Managers now treat the second quarter of 2026 as a checkpoint, not a reset. They are stretching duration in growth holdings and waiting to see whether the growth number holds.

AI Capex and Data Center Projections

JPMorgan Asset Management points straight at the supply chain for the next move higher. The firm sees more upside in the tech trade coming from AI data center spending. The numbers back that view.

• Hyperscalers directed 33 percent of operating cash flow into AI-related capital expenditure in 2023.
• That share is projected to reach 93 percent by 2026.

Nearly every extra dollar the big cloud operators generate will head into new builds instead of buybacks or dividends. Data center capacity, power deals, and specialized chips stand to benefit most. Because the outlays stretch across multiple years, the cycle itself turns into a steady demand source for everyone in the ecosystem.

And honestly, that kind of commitment changes the valuation math for suppliers. Revenue visibility stretches well beyond a normal cyclical peak, which supports richer multiples even after the first wave of AI excitement fades.

"There's more upside to the tech trade" in terms of the AI data center supply chain.

, Ogoshi (JPMorgan Asset Management) (Source)

Risk Factors and Portfolio Implications

Two risks still sit on the other side of the ledger. The Reserve Bank of Australia flags that corporate balance sheets look solid but could face higher energy costs that last. Data centers rank among the biggest new electricity users, so any sustained rise in power prices cuts directly into margins.

The World Bank separately expects growth to slow across emerging markets and developing economies in 2026 because of the Middle East conflict. Weaker expansion there could eventually trim demand for cloud services and hardware, even if domestic spending plans stay on track.

Managers therefore walk a narrow line. They can stay overweight the AI supply chain while layering hedges against energy and geopolitical moves. The evidence still supports the allocation, yet sizing and overlays now matter more than they did two years ago.

Synthesis

Capex intensity and the IMF growth baseline line up. Institutional money keeps tracking the spending cycle instead of pushing back. The BOJ stance takes one external constraint off the table, so the domestic AI story drives price action for now.

Conclusion

What remains to be seen is whether energy cost pressures or emerging-market weakness start to offset the 93 percent capex ratio by late 2026. Quarterly power-price disclosures from the biggest data-center operators will give the first clear read on whether the current backdrop holds.