Gabriela Santos, chief market strategist at J.P. Morgan Asset Management in America, noted that achieving true diversification in investments in artificial intelligence (AI) has become increasingly difficult. In an interview on CNBC’s Closing Bell Overtime, she said that capital expenditures on AI have risen significantly and affect almost all asset classes, including stocks, debt instruments, and private markets. This broad impact underscores the importance of a careful portfolio structure for investors who remain optimistic about the prospects for AI.
In July and August, the market experienced a weakening of momentum, which particularly affected stocks related to AI, serving as an important lesson for growth‑oriented investors. Santos emphasized: “You can be very, very optimistic about AI, but you must also take the portfolio structure seriously.” She advised investors to focus on aspects such as position size, leverage, and diversification, even while expecting further revenue growth supported by AI development. The evolving landscape of AI investments is complicating traditional sectors, as major cloud companies, chip manufacturers, and software development firms are increasingly diverging within their respective sectors.
Santos noted that opportunities for true diversification are becoming increasingly rare and are largely limited to government bonds, gold, prime real estate, and European stocks. Previously, bonds served as a buffer for portfolios during economic downturns, but this dynamic has changed. The return of competitive capital competition, along with supply shocks, inflation, and interest rate volatility, means that investors need additional inflation‑resistant assets to strengthen their portfolios. The future of this mixed structure will largely depend on how capital spending on AI develops over the remainder of the year, according to Santos.
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The material was prepared solely for informational and educational purposes and does not constitute financial advice or a recommendation.