JPMorgan: A Backdoor Way To Play The Coming Tech IPO Boom

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The seeds of the next big tech rally are being planted, fertilized, and watered by glowing assessments about the potential of Artificial Intelligence (AI). A bloom of stock offerings is inevitable. If you are looking to add a backdoor way into the coming boom in AI companies, shares of JPMorgan Chase & Co. (JPM) are a great way to do that, explains Jon Markman, editor at Weiss Ratings Daily.

Like now, the early 2000's featured dovish policies from the Federal Reserve. That time period also saw coordinated public investment in the infrastructure that digitized the commerce and telecommunications sectors. This time, the focus is on AI and related stocks.

Venture capitalists invested a record $42.5 billion during 2023 into 2,500 startups, according to CB Insights, a private analytics platform. Investors see fertile fields of opportunity as AI moves from the infrastructure phase to deployment. The hype certainly helps. Optimists say AI is bigger than the internet, and they are clearly investing for that future.


JPMorgan Chase & Co. (JPM)

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To find out, let's rewind to the late 1990's. Historically, investment banks have played a key role in fueling tech bubbles. They act as intermediaries — connecting VC firms with potential investors. 

In a hot market, investment banks are incentivized to push the narrative, potentially overlooking risk factors to get deals done and generate fees. This dynamic can exacerbate the bubble's formation. The 2002-2008 bull market post-Dot-Com Bubble should serve as a valuable lesson for pessimists.

Investment cycles follow predictable phases. The first phase is investment, followed by hype, then initial public offerings, more hype, and finally disillusion. Bears ignore the dynamism of the first four phases at their peril. The investment bankers have not started to arrange stock offerings, but they will.

JPM is the largest investment banker in the world by assets, a distinction that has been mostly true since the 1800's, when J. Pierpont Morgan was the financier to US Steel (X), the world’s first billion-dollar corporation. Since that time, executives at JPMorgan have had their fingers on the pulse of the capital markets, with extensive experience in global finance. 

These investment bankers are capable of creating hype and ultimately selling stock to the public. During the period from January 2002 through December 2008, JPMorgan shares advanced from $19.35 to $206.30 — when accounting for dividends and stock splits, a gain of 966.2%. 

Historical performance is no guarantee of future results. However, JPMorgan is in great financial health. And a strong harvest of AI companies should soon flower.

My recommended action would be to consider buying shares of JPMorgan.


About the Author

Jon Markman is a veteran journalist, investment adviser, and futurist whose research on ground-breaking technology companies over the past four decades has helped thousands of customers achieve their financial goals. He has served as an investment strategies columnist at the Los Angeles Times and Forbes magazine, as well as the founding managing editor at MSN Money.

Leveraging the power of Microsoft engineers, in 2001 he created the first successful stock-rating system for the public using advanced quantitative analytics.

Mr. Markman is currently the author of seven stock and options services: Disruptors & Dominators, Strategic Options and Weiss Technology Portfolio for Weiss Ratings; Fast Forward Investing for Forbes; and Strategic Advantage, Tactical Options and Counterpoint Options for his own independent site. He is also the author of five books on investing.


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