Gabriela Santos of JP Morgan Asset Management warned AI-related concentration risk has spilled from equities into fixed income. She said the AI supercycle investment case remains intact but investors must be cautious about portfolio construction. July’s tech sell-off — the PHLX Semiconductor Index plunged 21% (its largest monthly drop since 2008) and the KOSPI fell 22% — highlighted crowding risks. Santos urged tighter position-size controls, prudent use of leverage and diversification beyond AI

Gabriela Santos of JP Morgan Asset Management warned AI-related concentration risk has spilled from equities into fixed income. She said the AI supercycle investment case remains intact but investors must be cautious about portfolio construction. July’s tech sell-off — the PHLX Semiconductor Index plunged 21% (its largest monthly drop since 2008) and the KOSPI fell 22% — highlighted crowding risks. Santos urged tighter position-size controls, prudent use of leverage and diversification beyond AI, saying traditional risk factors, sectors, regions and even asset classes may no longer capture AI-driven concentration.