Disappointing earnings from artificial intelligence companies would pose a bigger risk to the tech-driven global stock rally than ongoing geopolitical tensions, according to JPMorgan Asset Management.

“There’s so much focus on AI, that some disappointment could lead to a bigger pullback,” said Kerry Craig, a global market strategist at the firm.

Strong AI demand and expectations for more Federal Reserve interest rate cuts have helped pushed equities worldwide to new records, with the four key US benchmarks soaring in unison to all-time highs. Any setback in earnings from mega tech firms may spark a selloff given their stretched valuations, as seen during the meltdown in April, according to Craig.

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Given the significant investment by hyperscalers, “if those aren’t translated into revenues, you could see the market start to reconsider the earnings growth of some of these companies at these valuations,” Craig said.

He sees less upside for US equities at current levels, while Europe may benefit from fiscal support. Japan may get a boost from corporate reform and emerging markets stand out for their attractive valuations, Craig said.