"The rise of the East and the decline of the West" trend remains unchanged! Morgan Stanley: Cautiously observing U.S. tech stocks, Chinese tech stocks still have attractiveness

According to the Zhitong Finance APP, JP Morgan recently released a stock strategy report, holding a neutral view on U.S. stocks, a cautious attitude towards growth investment styles and U.S. technology stocks, but maintaining an optimistic outlook on Chinese technology stocks.

JP Morgan stated that U.S. stocks benefit from a greater inclination towards growth investment styles, but the concentration risk is extremely high. Coupled with the overvaluation of U.S. stocks, JP Morgan no longer overweights U.S. equities. Nevertheless, JP Morgan does believe that economic activity in the U.S. will be stronger than in other countries, and the U.S. market may benefit from animal spirits and deregulation. Additionally, if trade uncertainties escalate, the adverse impact on the U.S. stock market is relatively small. During risk-averse periods, the U.S. stock market typically performs better than other markets.

JP Morgan reiterated its cautious stance on growth investment styles and U.S. technology stocks. Behind JP Morgan's neutral view on technology stocks this year, in addition to past strong performance, high valuations, ample positions, and high expectations, the bank still insists that historically, the winners of technological disruption are often outsiders rather than existing companies. Recent news may lead to an overall market expansion and a steepening adoption curve for artificial intelligence, but it also raises questions about the high valuations and expenditures of mega-cap companies like Google (GOOGL.US) and Microsoft (MSFT.US), foundational model companies like OpenAI and Meta (META.US), and Nvidia (NVDA.US). The dominance of the "seven giants" may continue to be challenged. Nevertheless, JP Morgan is not bearish on technology stocks, as their balance sheets and earnings are much better than they were at the end of the 1990s. JP Morgan again calls for a shift from hardware and semiconductor sectors to software sectors.

It is worth noting that, given more attractive valuations, JP Morgan remains optimistic about Chinese technology stocks. Furthermore, as the potentially underperforming fourth-quarter earnings season comes to an end and stimulus measures are about to be introduced, JP Morgan hopes to buy Chinese cyclical stocks in the first half of this year and is optimistic about the telecommunications, real estate, healthcare, insurance, and software sectors