JPMorgan's Pinto Sees Likely Correction in AI Valuations

Bloomberg

Watch JPMorgan's Pinto Sees Likely Correction in AI Valuations - Bloomberg on Dailymotion

Transcript

00:00What we are not seeing is a deterioration between what we were expecting in the credit cycle in any of the portfolios.

00:08So I think that credit remains solid from credit cards in the U.S. all the way to big corporates.

00:14But we will see how it plays and continues once the economy...

00:20I don't think that the economy will go into recession. It's likely to slow down.

00:25And the credit cycle will continue to normalize.

00:30But I don't think that in the credit cycle we see a deterioration beyond what we were expecting.

00:37If the economy slows down, where do you stand on the interest rate debate in America at the moment?

00:43Do you think the Fed is going to cut again in December or hold off?

00:46I think that maybe inflation is being quite resilient.

00:52The growth is slowing down.

00:56But still, this quarter I think that we should discount the numbers, whatever they can, because of the shutdown.

01:03That it will recover, whatever it is, it will recover in the next quarter, in the first quarter of next year.

01:10So we do see some deceleration.

01:12We do see some reduction in consumption.

01:16But it's still for healthy levels.

01:18So I think that the economy may grow less next year, but most likely it will avoid recession.

01:25Tariffs, they haven't had the full impact, but some will have a further impact next year.

01:32But also some will be compensated by the fiscal expansion.

01:38So I am relatively positive on what we are seeing.

01:42Having said that, markets are rising in a very, very benign scenario, and quite a bit more.

01:49So that I don't know.

01:52There may be issues or not, but the S&P at 6,700 or so, 23 times is quite healthy.

02:01You're not giving us a new S&P target.

02:04Well, whoever was giving target missed it all, so no.

02:10But I think that from here, you could have saw that the upside is relatively limited.

02:15Obviously, no.

02:16On stage interviews these days can't include AI.

02:19So here's the AI question.

02:21Where do you stand on the continuum of hype, bubble, and it's going to solve everything?

02:29Well, the technology is real, and we are, even though we've been dealing with traditional

02:37AI for the last 10 years, we are now working in large language models, and we deploy that

02:44to almost every employee that we have.

02:46We are using different forms of this to improve productivity across operations, technology,

02:53detecting fraud, surveillance, credit decisioning, improving client experience.

03:04It's all over the place, but it's still at a very early stage.

03:08So large language models that are still not having the impact that they should have, and

03:14we're still very, very early in the agentic journey.

03:19Clearly, this will have an impact in the labor market.

03:25Some jobs will be created, and some jobs will be eliminated.

03:29But I think that one thing that ones want to keep an eye on is how much capacity is being

03:37created, and how all these companies, how much revenues they are going to get to compensate,

03:43to pay for that capacity is likely.

03:47I don't know the probabilities, but it's possible there is probably a correction there, and that

03:55correction will also create a correction in the rest of the segments in the S&P and in

04:01the industry, because you are probably, in order to justify these valuations, you are considering

04:08a level of productivity that it will happen, but it may not happen as fast as the market

04:15is pricing.

04:15I think that you're going to keep in mind.

04:17Good news.

04:33hormones.

04:34And I feel very, very excited to hear from John K 8.

04:36Don't call me or to do your PhD and I think it's more famous for you guys

04:37in theги and mine.

04:39You just need to know that hope.

04:40See you more of the guy holding your head and my head.

04:40You can simply experience anything too many timesI think.

04:41That you need to know that.

04:42fuck you're not beginning too late, much.

04:43perspective.

Category

Transcript

Be the first to comment

Recommended