JPMorgan warns that AI-stock selling could be nearing a point of exhaustion as positioning resets

JPMorgan Chase is telling clients that recent selling in AI-related stocks may be nearing its limit, according to a market report citing a bank note. The bank’s view hinges on an apparent reset in equity positioning since mid-September, implying that some of the pressure behind the selloff may already have worked through.

The assessment appears to focus less on fundamentals and more on market mechanics, particularly how investors were positioned in AI themes and how that positioning has changed. The note, as described in the report, argues that equity positioning has reset significantly since mid-September, which could reduce the odds of continued, momentum-driven liquidation at the same pace.

The bank’s framing suggests investors have moved from one crowded stance into a new configuration, which can alter short-term flows. When positioning unwinds, further selling can become harder to sustain, not because demand improves immediately, but because the incremental selling pressure declines as investors trim or rebalance.

The report also characterizes the idea of a “limit” for AI stock selling as a potential shift from heavy to more stable trading conditions. JPMorgan did not, in the cited report, provide a precise threshold for when selling would stop or how long any stabilization might last.

Market context matters because the AI complex has been a large focus of institutional and retail flows for more than a year, with performance often influenced by expectations for technology adoption, spending cycles, and earnings visibility. In such environments, positioning and sentiment can amplify price moves in both directions, making banks’ flow-based commentary particularly prominent during periods of volatility.

Even so, JPMorgan’s warning is not a full market forecast. The reported note does not replace fundamental analysis with a flow-only thesis, and it does not specify which AI-related stocks or sectors are most exposed to the described positioning shift. For readers, the key takeaway is that the bank sees evidence of a meaningful repositioning, which it believes could dampen additional selling pressure.

What remains unclear is how durable that reset may be if macro conditions change or if earnings and guidance for AI-linked companies diverge from expectations. The cited report also does not disclose the methodology JPMorgan used to judge the scale of positioning change, such as which investor categories or derivatives indicates were examined.

Investors watching the AI complex may focus next on whether price action continues to track the extent of positioning adjustments. If selling continues despite the claimed reset, it would suggest either that positioning was not fully unwound or that new catalysts are overriding the flow-driven effect. If prices stabilize while broader risk sentiment stays firm, JPMorgan’s “near the limit” framing may gain more support.