Wall Street brokerages say AI selloff is overdone, downplay Democrat regulation risks
QQQ•Brokerages including Morgan Stanley and UBS said last week’s AI selloff was overdone and argued that extreme regulation risks are unlikely to materialize. Nvidia is expected to report a more than 12% quarterly rise in data center revenue when it reports earnings on November 17.
1. Brokerages weigh AI risks
Morgan Stanley said the selloff looked overdone, with regulation potentially pushing some data center projects from 2028 to 2029 rather than derailing capital spending. It said a longer AI investment cycle could smooth supply-demand rebalancing, improve credit outlooks and raise lease rates for computing capacity.
2. Earnings and IPO in focus
Morgan Stanley recommended “buying the drop” and remained positive on AI hyperscalers Amazon.com, Meta Platforms and Alphabet, as well as semiconductor, data storage and optical networking firms. HSBC said it was increasing equity exposure, leaning into US and Asian technology stocks, and viewed Anthropic’s IPO as a key catalyst. UBS analysts said markets had become too negative on AI political risk, credit risks and spending.
