JPMorgan Sees AI Stock Selloff as Buying Opportunity Despite Midterm Uncertainty

JPMorgan has reportedly advised investors to consider buying declines in artificial intelligence-related stocks if a Democratic sweep of the US midterm elections triggers further market weakness.
The bank expects AI capital expenditure to remain strong through 2028 regardless of the election outcome, arguing that political changes are unlikely to derail the industry's investment cycle.
JPMorgan's assessment also suggests that President Donald Trump would be unlikely to approve legislation imposing major restrictions on the sector, although future policy decisions remain uncertain.
The bank additionally points to historical market performance under divided government. According to its analysis, the S&P 500 has averaged a 21% gain over two-year periods of political gridlock since 1950, compared with 18% under unified party control.
These historical averages do not establish that divided government causes stronger returns. JPMorgan's investment thesis depends on continued AI spending and earnings growth, while elevated valuations and infrastructure costs remain potential risks.