JPMorgan Stock (JPM) Looks Undervalued Despite AI and Apple Card Tailwinds

JPMorgan Chase (JPM) is benefiting from growing momentum in artificial intelligence (AI), and its partnership with Apple (AAPL) for the Apple Card. Yet the stock still trades at a relatively modest valuation. Shares are down about 8% year-to-date and trade at under 14x forward earnings, suggesting the market has yet to fully reflect these growth drivers. I remain bullish on JPM because the current valuation still reflects an interest rate-sensitive lender rather than a diversified financial technology platform.

Founded in 1799 and headquartered in New York, JPMorgan operates across consumer banking, commercial banking, investment banking, and asset management. With around $4.4 trillion in total assets and approximately $57 billion in net income in 2025, JPM remains the largest bank in the U.S. and one of the most profitable banks globally. Understandably, that scale enables JPM to invest ahead of peers and convert efficiency gains into earnings growth at a level smaller institutions cannot match.

As JPMorgan Chase prepares for its quarterly earnings call on April 14, I expect more investors to focus on the company’s growth drivers. Therefore, despite the current volatility on Wall Street, JPM stock is likely to reward long-term investors well. Let’s see why.

Two Structural Catalysts the Market Is Mispricing

In recent months, investors have been concerned about JPM’s $105 billion annual expense guidance for 2026 and NII margin pressure from rate cuts. Yet, what that framing misses is that the largest driver of the expense increase is investment, not consumption. CEO Jamie Dimon has committed $19.8 billion to technology in 2026, with a substantial portion directed at AI already deployed across hundreds of use cases spanning fraud detection, risk management, client servicing, and trading strategy.

Dimon has described AI as transformationally significant, comparable to the printing press. In fact, for a bank with JPM’s cost base, automating its most repeatable processes is likely to convert this expense headwind into a multi-year margin expansion story. Meanwhile, I regard the second positive catalyst for JPMorgan Chase to be the Apple Card expansion. In January, JPM became the new issuer, acquiring at least $20 billion in revolving credit card receivables from Goldman Sachs (GS), a move that will strengthen JPM’s presence in mobile-first banking.

Nonetheless, when JPMorgan’s Q4 earnings showed a $2.2 billion reserve related to this forward-purchase commitment, investors began questioning the value of this acquisition. However, I believe adding the Apple Card income will significantly help the bank meet its future NII targets. Furthermore, management will now have access to a large, high-value, and digitally engaged user base.

Finally, the addition to JPM’s portfolio changes the earnings mix. Apple Card income is recurring, consumer-driven, and less sensitive to interest rate volatility. This should help make JPMorgan’s overall earnings base more stable and predictable than the current valuation implies.

Near-Term Risks Persist, but Valuation Reflects Them

Bears highlight that near-term risks for JPM include high expense guidance and uncertainty about the pace of Federal Reserve rate cuts, especially given the current volatility on Wall Street amid developments in the Middle East. These concerns are valid and have contributed to the recent weakness in JPM’s stock price. However, with the forward P/E below 14x, I believe these risks are already reflected in the JPM share price.

TipRanks readers may also want to know that JPM currently trades at a discount to the broader market as the forward P/E ratio of the S&P 500 (SPX) index sits at 19.9x, while that of the U.S. financial sector is around 14.7x. Thus, what is possibly not reflected in the current JPM share price is the combined impact of AI-driven efficiency, income expansion from the Apple Card business, and a potential recovery on Wall Street, especially for large-cap financial stocks, many of which will report earnings in April.

Prefer Not to Buy JPM Directly? Three ETFs That Give You the Exposure

Long-term investors in JPM stock would also benefit from its current dividend yield of almost 1.8% and its dividend growth over 17 years. Yet, those who prefer a more diversified portfolio approach may also research exchange-traded funds (ETFs). For example, the Financial Select Sector SPDR Fund (XLF) provides exposure to the U.S. financial sector basket. JPMorgan is among the top holdings in XLF, accounting for approximately 11.2% of the portfolio, alongside Berkshire Hathaway B (BRK.B), Visa (V), and Mastercard (MA).

Similarly, the iShares U.S. Financials ETF (IYF) allocates approximately 10.6% to JPMorgan and, notably, excludes payment processors such as Visa and Mastercard, which increases the fund’s concentration in traditional banking names. IYF could be a better fund choice for investors seeking a purer banking-sector tilt rather than a broad financial services basket that includes payments networks.

Finally, the Vanguard Financials ETF (VFH) holds JPMorgan as its largest position, at approximately 8.9% of the portfolio. VFH has a wider basket spanning banks, insurers, asset managers, and payment networks. Thus, the VFH fund suits investors who want JPM exposure as part of a genuinely diversified financial sector position, making it a more appropriate vehicle for those seeking sector breadth over concentrated banking exposure.

Is JPMorgan Stock a Buy, Sell, or Hold?

According to Wall Street analysts, JPMorgan Chase currently carries a Moderate Buy consensus rating, based on 21 analyst ratings from the past three months, consisting of 12 Buys and nine Holds. The average 12-month price target for JPM is $337.94, an upside of approximately 15%. The highest forecast is $400.

Conclusion

I regard JPMorgan Chase as a credible long-term buy that the market continues to underprice as a legacy rate-sensitive lender. The recent pullback in JPM’s share price brings its forward P/E below 14x, underscoring the value in a franchise that generated over $57 billion in 2025 net income and is getting ready to add the Apple Card business to its portfolio while deploying $19.8 billion in tech investment, with a focus on AI. In addition, the dividend has been growing for 17 consecutive years.

The plan is clear: buy the pullback in JPM stock, collect the growing dividend, and let the April 14 first-quarter report potentially begin the re-rating of the stock. For investors who prefer diversified exposure, ETFs such as XLF, IYF, and VFH also provide meaningful JPM weighting within broader financial-sector baskets.