New York, 8 October 2025 – JPMorgan Chase & Co. has flagged a series of bearish stock positions for the remainder of 2025, highlighting what its strategists describe as “overextended valuations” across select consumer and technology sectors. The Wall Street giant’s latest equity strategy note identifies a popular U.S. restaurant chain and a once high-flying semiconductor firm as top short ideas heading into the final quarter of the year.
According to JPMorgan’s research desk, the recommendations reflect growing caution over the sustainability of elevated earnings expectations in a market that has seen cyclical outperformance and record valuations through much of 2025. “While U.S. equities remain resilient overall, several names are now trading at stretched multiples that don’t fully reflect margin compression risks or slowing demand into year-end,” the report said.
The restaurant stock, unnamed in the public note but described by analysts as a “casual dining leader with aggressive post-pandemic expansion,” faces pressure from a combination of waning consumer discretionary spending and rising input costs. JPMorgan analysts noted that profit margins across the sector have narrowed in recent quarters as wage inflation and food costs remain sticky, while traffic volumes show signs of plateauing.
Meanwhile, the semiconductor company on the bank’s short radar, a manufacturer of GPUs and AI-related components that saw its valuation soar during the 2024–2025 artificial intelligence boom, is viewed as vulnerable to profit-taking and a potential slowdown in demand from hyperscale data centers. “Chipmakers have seen tremendous multiple expansion on AI-driven optimism. However, we believe the current pace of capital expenditure across major AI infrastructure providers will normalize, pressuring near-term growth projections,” the bank said.
The call underscores a more cautious tone from JPMorgan’s U.S. equity strategy team, which has maintained a neutral-to-underweight view on cyclical sectors entering the fourth quarter. Analysts have warned that while headline economic data remain steady, earnings quality has deteriorated, with a growing share of profits driven by cost-cutting rather than top-line growth.
Despite the bearish recommendations on select stocks, JPMorgan maintains that overall market sentiment remains “balanced,” with investors rotating toward defensives and value-oriented plays as volatility expectations rise. The firm’s strategists cited utilities, healthcare, and high-dividend names as potential safe havens heading into 2026.
The broader market has recently faced mixed signals, with the S&P 500 easing off record highs amid concerns over the U.S. government shutdown, while Treasury yields remain elevated and inflation expectations stubbornly anchored. JPMorgan’s latest short calls reflect a growing divergence in sector outlooks, a shift that investors are expected to watch closely as earnings season unfolds later this month.
