Giverny Capital flags JPMorgan earnings strength amid stock underperformance
JPMorgan Chase has compounded earnings in the low teens over the past decade, yet its shares have lagged the broader market, according to Giverny Capital Asset Management.
Giverny Capital Asset Management’s second-quarter 2026 investor letter highlighted a significant divergence in JPMorgan Chase & Co.’s performance, noting that the bank’s earnings growth has outpaced its share price appreciation. The investment manager observed that while JPMorgan has compounded earnings in the low teens over the past decade with recent acceleration, its stock has underperformed the broader market in 2026.
As of July 21, 2026, JPMorgan closed at $345.23 per share, reflecting a market capitalisation of $917.69 billion. The bank posted a one-month return of 3.53 per cent and gained 16.33 per cent over the past 52 weeks. Despite these figures, Giverny noted that the stock has lagged the market this year, contrasting with its long-term track record of healthy earnings per share growth.
The firm cited Benjamin Graham’s analogy of the market as a voting machine in the short term and a weighing machine in the long term to contextualise these anomalies. Giverny pointed out that while the S&P 500 rose 10.2 per cent in the first half of the year, 210 stocks lost value. The manager argued that it is unusual for two-thirds of the lagging group to underperform by more than 10 percentage points, especially when earnings growth is not concentrated solely in the top performers.
JPMorgan ranks 21 on Giverny’s list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. Data from the firm’s database indicates that 131 hedge fund portfolios held JPMorgan at the end of the first quarter of 2026, a figure unchanged from the previous quarter. Giverny included JPMorgan alongside other index constituents such as Charles Schwab, Mastercard, and Progressive Corp, noting that these firms continue to grow earnings at healthy rates despite stock price underperformance.
While acknowledging JPMorgan’s investment potential, Giverny stated that it believes certain AI stocks offer greater upside potential with less downside risk. The firm’s model portfolio returned 13.70 per cent in the second quarter, underperforming the S&P 500’s 15.20 per cent return. Year-to-date, the portfolio gained 5.89 per cent compared to the index’s 10.21 per cent increase.
