JPMorgan’s October Picks Shift Focus to Value AI and Health Care

JPMorgan’s October stock picks suggest a shift from the crowded AI-focused trades that dominated 2023, pointing investors toward value, AI power, and health care themes. The bank added American Express (AXP), Liberty Energy (LBRT), and Thermo Fisher Scientific (TMO) to its favorites, all with overweight ratings. This diversified approach comes as the fourth quarter begins.

American Express, down 18% year to date, is seen by JPMorgan as an opportunity due to its strong returns and consistent capital returns. Investors looking for ETF exposure can consider the Vanguard Financials ETF (VFH), where AXP accounts for 1.87% of assets. The Financial Select Sector SPDR Fund (XLF) offers a more concentrated financial-sector bet, with AXP representing 2.11% of the fund.

Liberty Energy stands out with a 54% gain over the past year, benefiting from surging electricity demand from data centers. JPMorgan expects tight conditions in the behind-the-meter power market through 2030. The VanEck Oil Services ETF (OIH) and the State Street SPDR S&P Oil & Gas Equipment & Services ETF (XES) provide ways to capture this theme, with Liberty Energy accounting for 2.41% and 3.5% of their portfolios, respectively.

Thermo Fisher Scientific, up 14.3% year to date and over 25% in the past three months, is poised for further upside from AI adoption and U.S. biopharma reshoring. The Health Care Select Sector SPDR Fund (XLV), with TMO making up roughly 4% of the ETF, offers a broader way to play this theme.