JPMorgan warns that AI stock movements are reminiscent of the 1990s market split, suggesting a critical period ahead. Recent earnings reports from companies like Alphabet and Tesla, which see increased AI spending, have been met with skepticism from investors. In contrast, Asian chipmakers such as SK Hynix and Samsung, benefiting from this spending, have shown positive market response. Notably, the Roundhill Magnificent Seven ETF has shown modest growth compared to the significant gains of the PHLX Semiconductor Index.

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Need to Know

AI stocks are echoing a 1990s market split. JPMorgan warns the next few weeks are critical.

A ‘more concerning unwind’ is the risk, says strategist

Updated July 23, 2026, 9:52 a.m. ET

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(7 min)

Artificial-intelligence stocks aren’t moving together — reminiscent of the dot-com bubble phase.Photo: Getty Images

Earnings results from Alphabet and Tesla have arrived this week to a chilly reception as both boosted artificial-intelligence spending plans amid continued investor fretting over the potential payoff.

Signs of more spending boosted Asian chip makers like SK Hynix KR:000660 and Samsung KR:005930, which reinforces this year’s price action wherein AI spenders are punished and AI-spending recipients are rewarded. The Roundhill Magnificent Seven exchange-traded fund MAGS is up about 1.5% versus a 70%-plus gain for the PHLX Semiconductor Index SOX.

About the Author

Barbara Kollmeyer

Barbara Kollmeyer is based in Madrid, where she leads MarketWatch's premarket coverage of financial markets and writes the Need to Know column. She has worked in London and Los Angeles for MarketWatch previously. Follow her on Twitter @bkollmeyer.

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