JPMorgan Favors Emerging-Market AI Stocks as 12x Valuations and a Weaker Dollar Boost Upside
Updated
Updated · MarketWatch · May 11
JPMorgan Favors Emerging-Market AI Stocks as 12x Valuations and a Weaker Dollar Boost Upside
9 articles · Updated · MarketWatch · May 11
JPMorgan said emerging-market AI stocks now offer more upside than U.S. peers, arguing the asset class can extend its 2026 rally in the second half.
At 12 times forward earnings versus 20 times for developed markets, emerging markets look cheaper, while the bank expects second-half dollar weakness to amplify returns.
Korea and Taiwan remain central to the call: Samsung Electronics, TSMC and SK Hynix make up about a quarter of the MSCI Emerging Market Index, and JPMorgan says memory-chip supply additions are unlikely before late 2027.
China tech is another overweight call, with 600 million generative-AI users—up 142% from 2025—even as a Chinese internet-stock index has fallen 10% this year and derated against U.S. peers.
JPMorgan says that setup is reinforced by $700 billion in expected 2026 U.S. hyperscaler AI capex, much of which flows through Asian suppliers, plus easing Middle East tensions and China growth "green shoots."
US firms are spending $700B on AI, but Asia reaps the hardware profits. How long can this lucrative imbalance last?
JPMorgan's EM rally hinges on a weaker dollar and dovish Fed. What if persistent inflation forces the Fed's hand otherwise?
AI-Driven Outperformance: How Emerging Markets Will Lead Global Equity Gains in the Second Half of 2026
Overview
JPMorgan’s mid-2026 outlook highlights artificial intelligence (AI) as a major driver of corporate earnings and emphasizes the resilience of the global economy. The bank advises investors to stay invested, diversify portfolios, and use market volatility to improve holdings. However, the report notes that while AI is broadly recognized as a growth engine, there is no detailed thesis or specific evidence provided for why emerging markets are uniquely positioned to outperform due to AI in the second half of 2026. Key drivers, such as the AI adoption cycle or macroeconomic tailwinds for emerging markets, are not elaborated in the available information.