JPMorgan Asset Management’s David Kelly argues most gains since the mid-1980s stem from a rising profit share of GDP and higher multiples, creating “increasingly lofty” scaffolding that may be unsustainable, echoing broader critiques of U.S. financialization since the Reagan era. The AI boom is central: The GPT-5 launch underwhelmed, a summer selloff erased $1 trillion, many GenAI projects fail in practice, data-center buildouts are matching consumer spending’s GDP boost, and AI unicorns tally $2.7 trillion in valuations despite thin revenues. These prompt warnings today’s leaders may be more overvalued than 1990s dot-com names.
All this comes as growth cools—with H1 2025 GDP around 1.75% and weakening jobs data—undercutting the case for elevated prices and leading strategists to advise diversification beyond U.S. mega-caps into international equities, core fixed income, and alternatives, even as Kelly concedes timing is uncertain after a remarkably long bull run.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
