AI TRENDS | Morgan Stanley: AI Sell-Off Looks Overdone as Data Center Delays May Ease Supply Constraints and Support Pricing

According to Jin10, Morgan Stanley said concerns that the U.S. election outcome could slow data center construction had prompted a sell-off in AI-related stocks, which the bank considers excessive. It said AI spending could continue to expand and that about 5 gigawatts of planned U.S. data center capacity originally expected in 2028 could be delayed until 2029 rather than canceled, leaving spending plans at hyperscale cloud providers largely unchanged. Analysts said the delay could extend the AI investment cycle by easing supply constraints and supporting pricing. Morgan Stanley continues to favor major AI beneficiaries, including Amazon, Microsoft, Meta, and Google, and sees opportunities among semiconductor, infrastructure, and software companies.