Morgan Stanley Warns Chip Rally Ran Too Far on AI Spending as Hyperscalers Build Lower-Cost Chips
Updated
Updated · Bloomberg · Jul 10
Morgan Stanley Warns Chip Rally Ran Too Far on AI Spending as Hyperscalers Build Lower-Cost Chips
3 articles · Updated · Bloomberg · Jul 10
Summary
Lisa Shalett, Morgan Stanley Wealth Management’s chief investment officer, told investors to be cautious on chipmakers, arguing the sector’s rally has outpaced fundamentals tied to AI spending.
Morgan Stanley’s warning rests on signs that chipmakers’ pricing power is limited as AI data-center systems are being re-engineered around cheaper proprietary chips.
Hyperscalers are increasingly designing those chips themselves, a shift that could curb demand for higher-priced external suppliers and challenge bullish assumptions behind recent gains.