Building the AI Supply Chain Thematic at J.P. Morgan

Shrey took on the AI thematic after the senior analyst set a broad brief: find the opportunities small and mid-cap stocks have in AI. The brief was intentionally open, and Shrey and his juniors owned the structure from day one.

The first week was landscape reading, working through what had already been published. From there, Shrey built a full AI supply chain diagram, tracing the value chain from raw materials and silicon mining through data center infrastructure to the frontier model builders. The goal was to identify every industry and sub-industry with meaningful exposure before touching a single stock.

With the supply chain mapped, the team moved to the universe construction phase. They identified the major AI companies driving CapEx, then traced their suppliers and the suppliers of those suppliers, sifting through supply chain data to isolate stocks with actual, meaningful revenue exposure to the AI build-out rather than peripheral or speculative ties.

Screening the Universe

Once the universe was defined, Shrey built a series of screens to identify the most actionable names. The screens covered valuation through PEG ratio, with stocks in the bottom quintile of their peer group flagged as value opportunities. A second screen identified stocks where growth expectations were already priced in at a level that would keep valuations elevated even under continued earnings compounding.

Two additional screens separated consensus from non-consensus plays. The consensus screen flagged stocks already widely recommended by sell-side brokers. The non-consensus screen surfaced names with meaningful AI revenue exposure that were being overlooked by the research community, the more interesting set for generating differentiated views.

The senior analyst reviewed the work, was satisfied with the structure and the screens, and asked for a few additional metrics on earnings growth expectations. Shrey incorporated those and the thematic moved toward publication.