Morgan Stanley: AI Stock Selloff Appears Overdone; Data Center Delays May Ease Supply Constraints and Support Pricing

Morgan Stanley believes that market concerns that the U.S. election outcome could slow data center construction, leading to a selloff in AI-related stocks, appear overdone. The bank said AI spending is likely to continue expanding, and noted that approximately 5 gigawatts of planned U.S. data center capacity originally expected in 2028 may be delayed to 2029 rather than canceled.

Morgan Stanley said this leaves hyperscalers' spending plans largely unchanged. Analysts said the 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 finding opportunities in semiconductor, infrastructure, and software companies.