JPMorgan backs quality stocks as a safe haven amid AI volatility

JPMorgan Asset Management recommends investors seeking safety as AI reshapes industries consider the "quality" factor. Quality stocks are firms with strong, consistent cash flow and earnings, seasoned management teams, and clear competitive advantages. Despite those traits, quality has lagged the broader market recently and is described by JPMorgan as being in one of its worst stretches in almost two decades.

In 2025, quality stocks underperformed their counterparts by almost 5%. JPMorgan notes that past stretches of quality underperformance have often been followed by sharp reversals. Meera Pandit, a global market strategist at JPMorgan Asset Management, points to 2003–2008 as an example: higher-quality companies lagged from 2003 to 2006 but then outperformed by seven percentage points in both 2007 and 2008 as the cycle matured.

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