Morgan Stanley and UBS Diverge on AI Investment Themes: The Former Is Bullish on Cloud Service Provider Rotation, While the Latter Bets on AI Infrastructure Revaluation

As internal rotation within the U.S. stock AI sector intensifies, Morgan Stanley and UBS have offered divergent views on the next phase of AI investment trends. Morgan Stanley believes capital is shifting from the previously sharply rallying semiconductor sector to large-scale cloud service providers such as Microsoft, Amazon, and Meta. The AI rally is not over; instead, it has entered a sector rotation phase. UBS, by contrast, is more optimistic about the long-term value creation capacity of AI infrastructure. Its Holt team projects that the profitability of memory chip firms including Samsung Electronics, SK Hynix, and Micron will continue to improve. The economic profit of the AI infrastructure sector is expected to surge from around $200 billion in 2023 to $1.4 trillion in 2027, a roughly 600% increase, while the economic profit of large cloud service providers is forecast to reach only around $400 billion over the same period. UBS contends that the memory chip industry is transitioning from a traditional cyclical sector to one of the most important value creators in the AI industrial chain.