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

Morgan Stanley notes that investors may rotate from semiconductor stocks to hyperscalers as the AI cycle shifts, with chipmakers having already rallied sharply on AI capex expectations. The brokerage cited potential near-term capex discipline, a recent recovery in the Roundhill Magnificent Seven ETF, falling crude oil prices, and easing rate hike expectations as drivers of the rotation, while names like Alphabet, Amazon and Meta Platforms could benefit alongside consumer discretionary, transports and biotech stocks.