Morgan Stanley analysts cautioned that U.S. stocks may struggle to reach fresh highs as investors rotate out of semiconductor shares and into hyperscalers such as Microsoft (MSFT), Amazon (AMZN) and Meta (META). The bank said momentum in chip stocks is fading and maintained a year-end S&P 500 target of 8,000.
JPMorgan analysts, on the other hand, argued that the recent semiconductor pullback is a buying opportunity and that the AI-driven chip cycle remains strong, with meaningful new supply unlikely before 2028, and continued to favor chipmakers over hyperscalers.
Indexes tracking semiconductor stocks and hyperscalers have retreated from recent highs as investors question rich valuations and reassess the outlook for AI-related trades. It’s possible this led to some capital flows into the floundering crypto market, where bitcoin last week bounced nearly 10% from lows of about $58,000.
After nearly touching $64,000 over the weekend, bitcoin has pulled back Monday morning to $61,500.
