This article first appeared on GuruFocus.

The AI boom just hit a colder draft than investors might prefer. JPMorgan Chase (NYSE:JPM) Vice Chairman Daniel Pinto suggested that the sector's valuations could be running ahead of themselves, warning that any pullback in AI pricing may spill into the broader equity market. Speaking in Johannesburg at the Bloomberg Africa Business Summit, he noted that today's multiples are built on a level of productivity that could take longer to materialize than the market currently assumes. With the largest US tech names preparing to spend an estimated $371 billion this year on data-center infrastructure and McKinsey projecting $5.2 trillion needed by the end of the decade the stakes around AI spending cycles are possibly entering a more volatile phase.

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Pinto also hinted that the broader US market may be facing limited upside, even if a recession still looks unlikely. He said some economic deceleration could emerge next year, adding his voice to a growing list of Wall Street leaders who worry that AI enthusiasm may be racing ahead of fundamentals. For investors, the message may be that the next leg of the AI cycle becomes more selective one where productivity gains still come, but potentially not at the speed embedded in today's valuations.

At the same time, Pinto emphasized that JPMorgan's long-term strategy in Africa is gaining momentum. The bank is expanding its footprint after CEO Jamie Dimon's 2024 visits across Nigeria, Kenya and South Africa, and now works with about 350 clients across the continent. JPMorgan is in the process of upgrading its license in Nigeria and continues to build out offerings that include custody, payments, commercial banking and equity research. Pinto said shifting global supply chains influenced by ongoing trade tensions between the US and China could steer new opportunities toward African markets. Preparing for his planned retirement by June 2026, he added that he expects his next chapter to move away from day-to-day management, following his recent decision to join the board of Johnson & Johnson.