AI supply chain and energy security are still the top choices, and the risk and reward are better after the technical correction (Morgan Stanley)
Morgan Stanley believes that the AI supply chain has better risk returns after the recent technical correction.
Morgan Stanley believes that the AI supply chain has better risk returns after the recent technical correction. The capital expenditure competition in the AI ecosystem between China and the United States and the trend of supply chain diversification are strengthening the core judgment of the investment super cycle, and computing demand will continue to exceed supply. The index selects 29 Asia-Pacific AI infrastructure stocks and maintains its preference for China's AI path and energy security, renewable energy/energy storage, defense and other sectors, while warning retail investors of risks such as leverage congestion and the situation in the Middle East. The market has concerns about the valuation and congestion of the AI sector, but the report believes that the pullback provides better opportunities for intervention. The potential transaction implication is that it is highlights that investors focus on the barbell allocation of AI computing infrastructure combined with energy materials, and cautious rating consumer and positive rating industrial and materials to spread uncertainty. One sentence conclusion: The AI supply chain and energy security themes are more attractive after the short-term correction, and the long-term growth logic remains unchanged. It is highlights to use a barbell strategy for allocation to seize investment opportunities under the AI super cycle and changes in the geopolitical landscape. Positive/negative: Positive for Asia-Pacific AI infrastructure stocks, energy security, and defense-related stocks. The current market has overreacted to the short-term correction in the AI sector, but the core logic of long-term growth has not changed, and the correction provides layout opportunities. Catalysts: 1) Capital expenditure data of Chinese and American technology giants; 2) Shipment data of products such as AI chips and servers; 3) The impact of geopolitical events, such as the situation in the Middle East, on the energy security theme.