Wall Street brokerages including Morgan Stanley and UBS called last week’s rout in the AI trade overdone, arguing that the risks of extreme regulation of data center developments under a Democrat-controlled Congress are unlikely to play out.
\n\nThey instead pointed to Anthropic’s IPO and Nvidia’s upcoming quarterly earnings as events likely to have a bigger impact on the AI trade.
\n\nNvidia is set to report earnings after the markets close on November 17 and is expected to report a more than 12% rise in data center revenue on a quarterly basis.
\n\nMorgan Stanley said the selloff looked overdone and that the ultimate impact would be a push-out of some projects from 2028 to 2029, rather than a derailing of the capex story.
\n\n”This has the potential to elongate the AI capex cycle, which has positives including: a smoother supply-demand rebalancing across the data center supply chain, improved credit outlook, and higher lease rates for compute,” the analysts said in a note.
\n\nAlso read: Forget tech and hide out in these stocks instead, Goldman Sachs says
\n\nThe brokerage said it recommended ”buying the drop” and remained positive on AI hyperscalers including Amazon.com, Meta Platforms and Alphabet.
\n\nIt also said it saw…
Original source: https://www.cnbctv18.com/technology/
