Sellers of chips are making money, while users of chips are losing money! JPMorgan: The next few weeks will be crucial for the fate of the US stock market.

Internal differentiation is taking place in the AI theme stocks- chip and other basic infrastructure suppliers are continuing to strengthen, while the tech giants investing heavily in AI are stagnating. Strategists at JPMorgan Chase warned that this situation is alarmingly similar to the dot-com bubble of the late 1990s, and the price trends in the coming weeks will determine whether this differentiation is a healthy rotation or a precursor to a larger-scale collapse. Alphabet (GOOGL.US) and Tesla, Inc. (TSLA.US) both announced increases in AI capital expenditures this week, but the market response was tepid. This further reinforces the main trend logic this year: "selling the shovel" of AI - chip manufacturers and infrastructure providers - continue to benefit, while the "users of the shovel" - tech giants buying AI computing power on a large scale - are punished by investors. The Roundhill Magnificent Seven ETF (MAGS) has only risen by about 1.5% this year, while the Philadelphia Semiconductor Index (SOX) has risen by over 70% during the same period. JPMorgan Chase strategist Jason Hunter warned clients on Wednesday that if the tech giants cannot break through key technical resistance levels, and the semiconductor sector continues to linger below key resistance levels, "what initially started as rotation within the AI theme may evolve into a more worrying overall collapse." The Ghosts of the 1990s: Historical Recurrence or False Alarm? Michael Cembalest, Chief Market Strategist and Head of Market and Investment Strategy at JPMorgan Asset Management, detailed this historical analogy in a podcast aired by the bank on Wednesday. He pointed out that in the late 1990s after the boom of the Internet, the market experienced a similar internal rift: communication service stocks peaked and traded sideways, while infrastructure stocks continued to rise, "which was a false signal for the market." The current situation is highly aligned with this pattern - the tech giants at the forefront of the AI supply chain are seeing declining free cash flow and stagnant stock prices, while chip manufacturers, infrastructure providers, and optical networking companies continue to rise. Cembalest pointed out the issue with a vivid metaphor: "You always want the cars of the train to move slower than the locomotive, but the current situation is just the opposite." In a research report chart dated July 1st, Hunter clearly presented the historical trend at the end of the Internet bubble, and pointed out that since early July, the SOX index has retraced 20% from its peak, while the tech giant sector of the super-scale cloud computing industry has rebounded within the wide range of 2026. Optimism and pessimism: two interpretations, equally weighted For the current market situation, Hunter provided two sharply contrasting interpretations and believed that both have technical basis. Optimists believe that the tech giants in the cloud computing industry are finding support within the trading range, indicating that funds are flowing out of crowded hardware sectors, and this rotation will ultimately make the AI theme more sustainable in the next few months and even quarters. Pessimists point out that similar sector convergences occurred in the second quarter of 2000, which actually marked the top of the entire market cycle. "From a technical analysis perspective, both arguments have their validity, which is why we believe the price trends in the coming weeks are crucial," Hunter said. Key technical levels: numbers that determine fate Hunter delineated a series of key technical levels that investors need to closely monitor. On the semiconductor index side, SOX must break through the short-term resistance range of 12,769 to 13,333. If it fails to do so, the index may fall back to the support range of 9,975 to 10,554, which means a larger retracement of 28% to 32% from the June high. However, Hunter also pointed out that if SOX falls to this lower support range in the coming weeks, it can be seen as a "trading buy opportunity." At the individual stock level, Hunter detailed the key positions of several core targets: Alphabet: Needs to break through the 50-day moving average of $368 and the resistance levels of $381, but the stock was trading at $328 pre-market on Thursday, still a gap from the target. Amazon.com, Inc.: Needs to break through the resistance range of $251 to $258 to "confirm the continuation of a larger bullish trend," with the next target being $278. Meta: After a recent rebound from the range of $525 to $553, the stock was blocked near $669 to $694. If it can break through $694, it will be a "strong bullish signal." Microsoft Corporation: Key support is around $350, but the stock price is currently well below the medium-term resistance range of $465 to $493, needing to break through the 50-day moving average of $400, the 61.8% retracement level since May of $421, and the 200-day moving average of $438. This article is reproduced from "Wall Street News"; GMTEight Editor: Li Fo.