JPMorgan: Mag 7 valuation reset largely complete; long semis / short software into Q4
What happened
JPMorgan equity strategists led by Mislav Matejka said in a strategy note published Monday that the Magnificent Seven's painful valuation reset may be largely complete, potentially removing one of the biggest headwinds weighing on mega-cap tech. The group's 12-month forward price-to-earnings multiple relative to the broader market has fallen to about one standard deviation below its historical median — a 10-year low. The note adds a fresh tactical call: pair long positions in semiconductors with shorts in software heading into the fourth quarter, with Matejka predicting the sector's returns should improve as earnings momentum stays intact and examples of companies monetizing AI capex grow.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected
- All seven Mag 7 names: AAPL, MSFT, NVDA, AMZN, GOOGL, META, TSLA (constructive tilt); semiconductor names favored by the long-semis leg (chipmakers broadly; a Sept 13 JPMorgan note was positive on memory-chip makers Micron, SK Hynix, Samsung); software stocks singled out as shorts in the pairs trade.