JPMorgan warned that the conditions that allowed AI infrastructure stocks to rebound in July are currently absent, making a rapid rebound unlikely. In July, the SOX index fell 21%, its worst monthly performance since October 2008, before retail investors, corporate buybacks and short covering reversed the decline. According to the bank, retail enthusiasm has not returned, buyback programs have stalled and short interest sits at historically low levels, removing typical upward pressure. South Korean memory chip stocks have been particularly hard hit, with the KOSPI declining sharply. JPMorgan advises investors to monitor data center financing indicators and companies’ ability to demonstrate real AI monetization.
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