JP Morgan Advised Investors to Buy Tech Stocks
The bank signals that the recent decline in technology sector valuations has ended.
Updated on Sept. 28, 2026 in Semiconductors
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JP Morgan has advised investors to resume purchasing technology sector stocks after a three-month decline in share values. The firm suggests prioritizing semiconductor companies over software businesses as market positioning becomes less concentrated.
Why it matters
The firm cites robust earnings and consistent revenue from artificial intelligence infrastructure as primary drivers for the shift. Investors are encouraged to return to the sector as recent price adjustments related to cash flow and debt levels are likely complete.
Semiconductor companies have seen forward earnings estimates grow by 30% since June, while the Magnificent Seven stocks are currently trading at their lowest valuations in 10 years.
The players
JP Morgan
This global financial services firm provides investment banking, asset management, and commercial banking services to institutional and retail clients worldwide.
Mislav Matejka
He serves as a lead strategist for JP Morgan, providing market analysis and investment recommendations for global equity portfolios.
The details
JP Morgan strategist Mislav Matejka suggests the tech sector has undergone a necessary de-rating process where valuations have fallen across most areas. While the bank expects continued growth, it warns that tech stocks are unlikely to see the extreme outperformance recorded in previous years.
Timeline
June 2026 marked the beginning of the technology share stall.
Two weeks ago, software shares saw a rally against chip stocks.
Last week, the stagnation of the technology and AI trade concluded.
The Magnificent Seven have been tracked over the past ten years for valuation records.
The Tech Race
This guidance places the current market shift against the historical valuation period of the Magnificent Seven technology stocks. By identifying a potential floor in valuations, the firm marks a pivot from the recent stagnation toward a new phase of sector-specific growth.
Retail investors may find new opportunities in tech portfolios as valuations align with historical averages. However, shifting from broad software holdings to specialized chip manufacturers requires careful adjustment of sector-specific allocations.
The takeaway
Investors should note that while the tech sector shows renewed promise, historical patterns suggest future gains will be more moderate than previous bull runs. Focus on fundamental earnings growth rather than anticipating the extreme volatility of past years.
Further reading
For more on the current market climate, explore our analysis of the Semiconductors sector.
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