Morgan Stanley Urges Buying AI Dip, Backs Hyperscalers Amid $3.4 Trillion Capex Outlook

Morgan Stanley is advising investors to buy the recent pullback in artificial intelligence stocks, describing the market selloff following the U.S. midterm elections as an overreaction. The bank reiterated its Overweight stance on mega-cap hyperscalers including Amazon, Meta, Alphabet, and Microsoft, alongside chipmakers like Nvidia. Morgan Stanley maintained its hyperscaler capital expenditure forecasts of $1.6 trillion in 2027 and $1.8 trillion in 2028, totaling $3.4 trillion. While regulatory and power constraints may delay about 20% of planned 2028 U.S. data center projects into 2029, the bank views this shift as healthy for balancing supply and demand.