Morgan Stanley: AI Chip Cooling Off, Cloud Giants Could See Rotation

BlockBeats News, July 7th, Morgan Stanley strategist Mike Wilson's team believes that the recent pullback in semiconductor stocks may signal a more turbulent phase for the US stock market, and the leading direction within AI trading may also change.

The bank believes that chip stocks have previously outperformed the market by a large margin, but large cloud computing platform companies have relatively lagged behind. As the market reassesses the ROI of AI capital expenditures, funds may shift from the semiconductor supply chain to hyperscalers such as Microsoft, Amazon, Alphabet, and Meta.

Wilson's team's logic is that AI infrastructure construction still ultimately relies on continuous investment from cloud giants. If investors start to believe that these companies can maintain profit expansion while controlling spending, the valuation repair space for cloud giants may reopen.

Morgan Stanley also points out that the market is no longer solely driven by the AI theme. Previously underperforming sectors such as consumer discretionary and biotech may also see allocation demand in the backdrop of falling rate expectations and easing oil price pressures.