As the momentum in the semiconductor sector, which has driven the U.S. stock market this year, weakens, there are predictions that funds may shift towards large cloud companies and other sectors. Analysts suggest that rather than a cooling of interest in artificial intelligence (AI) investments, attention is broadening to areas that have not seen as much growth compared to chip manufacturers.
On July 6, local time, Morgan Stanley's strategy team, led by Chief U.S. Equity Strategist Michael Wilson, stated in a recent report that "the weakness in U.S. semiconductor stocks could signal a shift in market leadership."
Morgan Stanley believes that investors may refocus on major cloud companies such as Amazon, Microsoft, Alphabet, and Meta, which are known as hyperscalers operating large data centers and cloud infrastructure.
The report highlighted that these companies play a crucial role in the AI ecosystem while maintaining strong foundations in advertising, e-commerce, and cloud services.
In contrast, it was noted that chip-related stocks have already surged in anticipation of AI infrastructure investments, suggesting that further short-term gains may be limited.
The Philadelphia Semiconductor Index rose 11% in June but has since dropped more than 11% in the past two weeks. Morgan Stanley analyzed that "easing concerns over interest rate hikes and falling international oil prices have also encouraged a rotation into other sectors."
Beneficiary sectors mentioned include consumer discretionary, transportation, and biotech. JP Morgan also commented that "the upward trend in the stock market in the second half could extend beyond tech stocks," adding that "AI will not be the only narrative."
However, Morgan Stanley does not believe that AI investment itself has come to an end. While big tech companies like Alphabet and Amazon have invested heavily in AI infrastructure, there may be a growing emphasis on efficiency and profitability over the scale of investment moving forward.
In an interview with Bloomberg TV, Wilson stated, "Large cloud companies are now expected to stabilize," while predicting that semiconductor stocks will undergo corrections. He set a year-end target of 8,000 for the S&P 500, indicating that there is still room for further gains in the U.S. stock market.
* This article has been translated by AI.
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