Japan Equity Strategy: Transformative companies in the AI era: Searching for the next Recruit

Research evidence excerpt

Japan Equity Strategy: Transformative companies in the AI era: Searching for the next Recruit

J P M O R G A N Global Markets Strategy

10 July 2026

Japan Equity Strategy

Transformative companies in the AI era: Searching for

the next Recruit

Following a market rally driven by AI semiconductor stocks in April-June, investor Equity Strategy

ACinterest broadened in early July from AI stocks to IT services and domestic-demand Rie Nishihara

stocks. Market volatility is widely expected to increase in 2H 2026, given that (81-3) 6736-8629

expectations of higher US interest rates are being factored into gold futures prices, and rie.nishihara@jpmorgan.com

that the debate about the sustainability of the growth of hyperscalers’ AI investments JPMorgan Securities Japan Co., Ltd.

rages on. The benefits of rising stock prices have thus far been concentrated in the Yong Guo, CFA

supply side of AI semiconductors, but with AI adoption increasing, we believe (81-3) 6736-8623

yong.guo@jpmorgan.com

investment opportunities are growing among AI-user companies, by which we mean JPMorgan Securities Japan Co., Ltd.

corporations that leverage AI to redefine their business models and significantly

Mansi Das

increase their earnings power. One example of such success is Recruit Holdings (91) 2261 573343

(6098). When reporting earnings in May 2026, the company redefined its business mansi.das@jpmchase.com

model from a personnel-matching company that uses AI to an AI-driven staffing J.P. Morgan India Private Limited

company and raised its operating profit CAGR to 30% (based on five-year actual

results from FY2021 to FY2025). From the May 15 earnings release through July 9,

the share price rose by around 70%. Recruit’s market position thus shifted from a