Morgan Stanley: AI Stock Selloff Seems Overdone, Data Center Delays May Support Pricing

Morgan Stanley believes that market concerns that U.S. election results could slow data center construction have triggered a selloff in AI-related stocks, and this selloff appears overdone. The firm stated that AI spending is likely to continue expanding, noting that approximately 5 gigawatts of planned U.S. data center capacity originally expected by 2028 may be delayed to 2029 rather than canceled. Morgan Stanley said this leaves hyperscaler cloud providers' spending plans largely unchanged. Analysts noted that this delay could extend the AI investment cycle by easing supply constraints and supporting pricing; they remain bullish on major AI beneficiaries including Amazon, Microsoft, Meta, and Google, while also identifying opportunities among semiconductor, infrastructure, and software companies.