AI investors may pivot to hyperscalers from chipmakers, Morgan Stanley says

Morgan Stanley said the recent weakness in U.S. semiconductor stocks is a sign that the market gains are broadening, with investors likely to turn toward AI “hyperscalers” as well as consumer discretionary, transport and biotechnology shares.

In a note dated Monday, the brokerage said ‌hyperscalers, an ⁠industry ⁠term for tech companies that are spending big on data centers, ​could benefit from a rotation away from semiconductor stocks as the AI ​cycle shifts.