JPMorgan Projects 7% Returns Driven by AI Boom

JPMorgan Asset Management projects a 7% annual return for 60/40 portfolios over the next 10 to 15 years in its 2027 Long-Term Capital Market Assumptions. The firm attributes this outlook to a "CapEx supernova" fueled by an artificial intelligence boom, which it expects will significantly increase long-term productivity across the global economy.

While immediate gains remain concentrated in the technology sector, the firm anticipates these benefits will broaden over the next decade. The report estimates that by 2040, AI will be capable of performing over 70% of tasks currently handled by global workers at twice the speed of humans.

Beyond AI, the firm notes that fixed income markets have become more attractive following recent repricing. To hedge against inflation and global volatility, the report recommends diversifying into private markets and alternatives. For the first time, the research framework includes a return range for Bitcoin to assist clients, although the firm does not recommend it as a core portfolio allocation.