The decline in AI stocks raises doubts about a repeat of the July rebound

JPMorgan believes that AI stocks do not appear poised for a swift and robust recovery—similar to the rally seen last July—amid the sharp downturn currently weighing on the sector this October.

This outlook comes as investor risk appetite wanes and concerns mount regarding the high valuations of AI companies, suggesting that any potential recovery will depend on a resurgence in investment demand and an improvement in market confidence.