JPMorgan Asset Management Identifies Key Investment Opportunities Amid Market Uncertainty
As the financial landscape navigates a complex second half of 2025, JPMorgan Asset Management has pinpointed two promising arenas for equity investors seeking growth: international markets and companies benefiting from the artificial intelligence (AI) revolution.
International Stocks Gaining Momentum
Despite ongoing geopolitical tensions and trade challenges, global equities outside the United States have shown remarkable resilience. The iShares Core MSCI International Developed Markets ETF has surged more than 17% year-to-date, while emerging markets tracked by the iShares MSCI Emerging Markets ETF have witnessed a similar rally. This contrasts with the S&P 500’s more modest 7% gain over the same period.
JPMorgan’s midyear outlook anticipates this upward trend will persist. “We expect robust momentum to continue internationally, with regions like Japan and India potentially catching up during H2,” said Gabriela Santos, JPMorgan’s Chief Strategist for the Americas. She also highlighted the probable further depreciation of the U.S. dollar, attributing it to its currently elevated level and shifting economic drivers.
Context: A Shift in Global Economic Dynamics
This shift comes amid increasing U.S. trade pressures, including a series of tariffs announced by former President Donald Trump. However, Santos stresses that this trend is not signaling the demise of U.S. economic leadership but rather a significant “normalization of exceptionalism.” After over a decade of U.S. market dominance and stretched valuations, international markets are catching up from a historically low base.
Artificial Intelligence: Beyond the Magnificent Seven
Apart from geography, technology remains a critical investment theme. The AI boom that invigorated major tech stocks—often dubbed the “Magnificent Seven”—is entering a more diversified phase. While these tech giants are still driving growth, their projected earnings growth has slowed from 27% in Q1 to 14% in Q2.
“AI is not just a buzzword—it’s a transformative force shaping market dynamics,” noted Santos. However, she encourages investors to look beyond the usual large-cap tech stalwarts. The next wave of AI beneficiaries includes sectors like utilities and industrials, especially companies integrating AI for productivity enhancements. Semiconductors, vital components in AI technology, are also poised to benefit significantly.
Implications for Investors
- Diversification is key: Considering exposure to international equities can capitalize on undervalued markets primed for growth.
- AI adoption is broadening: Invest not only in tech giants but also in industries leveraging AI to boost efficiency.
- Currency movements matter: A weakening U.S. dollar potentially makes international investments more attractive for American investors.
As global markets adjust to new policy realities and technological waves, investors who carefully navigate these changes may uncover valuable opportunities amid the uncertainty.
Editor’s Note
JPMorgan’s analysis underscores a pivotal moment where prior market dominance is giving way to a more balanced global investment landscape. The evolving AI narrative offers fresh potential beyond headline tech stocks, inviting a closer look at how industries incorporate innovation. For American investors, the interplay between currency shifts and international equity performance offers both risk and reward. Going forward, staying informed and adaptable will be critical as markets respond to policy shifts and technological disruption.
