Morgan Stanley Urges Buying AI Stocks After Selloff
The brokerage recommends a selective buy-the-drop strategy after tech stocks fell on Democratic midterm victories and a data centre capacity shift.
Updated on Nov. 10, 2026 in Data Centers
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Tech stocks plunged after Democratic victories in the US midterm elections, which raised concerns that a Democrat-controlled Congress would curb AI data centre spending. Morgan Stanley recommended selectively buying the dip across hyperscalers, semiconductors, and infrastructure companies.
Why it matters
Investors fear that new political pressure could slow the AI spending that has driven tech valuations, but Morgan Stanley argues newly elected Democratic governors are unlikely to disrupt projects already under construction. The firm's view frames the selloff as a potential entry point rather than a sign of a broader collapse in AI demand.
Morgan Stanley's report projects US data centre additions will fall 4% year-on-year in 2028 before rising 38% in 2029, while global additions rise 9% in 2028 and 20% in 2029. The report does not state how the shifted 5 GW will be affected by the new state requirements in Texas and Ohio.
The players
Morgan Stanley
A major international investment bank and brokerage firm whose research division published the report recommending selective AI stock purchases.
Nvidia
A leading semiconductor company whose graphics processors are central to AI model training and data centre hardware.
The details
Morgan Stanley shifted 5 GW of US data centre capacity from 2028 to 2029, and the brokerage recommends a selective buy-the-drop strategy focused on hyperscalers including Amazon, Meta, Google, and Microsoft, along with Nvidia and infrastructure and software names. Some 2028 projects in Texas and Ohio will be delayed as governors work with legislators on new requirements for data centre developers.
Timeline
2027: Morgan Stanley expects higher AI-related debt issuance led by hyperscalers.
2028: Some data centre projects shift from 2028 to 2029 per Morgan Stanley.
2029: Shifted data centre projects are expected to come online.
Market Landscape
Morgan Stanley's forecast places the 5 GW shift within a broader pattern of AI infrastructure build-outs that have concentrated spending among a few hyperscalers. Spillover of roughly 20GW across Asia and EMEA suggests the timing changes may extend beyond the United States.
For investors with exposure to tech stocks, the selloff and Morgan Stanley's buy-the-drop advice bear directly on portfolio decisions in hyperscalers and semiconductors. Consumers and businesses relying on AI services may see capacity delays in the 2028 timeframe, though the stub does not quantify any price or service effect.
The takeaway
Investors weighing AI stocks after a political selloff may find that timing shifts in infrastructure matter more than headline reactions. Watching whether new state requirements in Texas and Ohio cause further delays will help clarify the outlook.
What happens next
Morgan Stanley expects 2028 data centre projects to shift to 2029, with the shifted capacity expected to come online that year.
Further reading
For broader context on how AI infrastructure is reshaping investment, see Data Centers.
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