Wall Street Sees Dip-Buying in U.S. Tech Selloff; Morgan Stanley Says Add Exposure Over Next 2-3 Weeks
Summary
- Mike Wilson said the next two to three weeks would be a period to increase equity exposure after the plunge in U.S. technology stocks.
- Wilson and Ed Yardeni set year-end S&P 500 index targets of 8,000 and 7,900, respectively, and described the latest selloff as a simple correction.
- Kwon Oh-sung warned that semiconductor and AI infrastructure-related stocks could face downward pressure, but said concerns over a slowdown in AI investment may help support shares of Alphabet and Amazon.
Forecast Trend Report by Period
Major Wall Street firms are looking for buying opportunities after the recent plunge in U.S. technology stocks.
Bloomberg reported on Nov. 7 that the S&P 500 and Nasdaq 100 fell 4.4% and 6.4%, respectively, on Nov. 5. Concerns that regulation of data centers and the artificial intelligence industry could tighten after Democrats won a landslide in the U.S. midterm elections added to the selling pressure.
Mike Wilson, Morgan Stanley's chief U.S. equity strategist, said the next two to three weeks would be a time to increase equity exposure. He maintained his year-end target for the S&P 500 at 8,000, about 8.4% above the Nov. 6 close.
Ed Yardeni, chief investment strategist at Yardeni Research, also described the decline as a simple correction rather than the bursting of a bubble. While the AI bubble is gradually deflating, he does not see it leading to a collapse that would deal a serious blow to the economy. He set a year-end S&P 500 target of 7,900.
Kwon Oh-sung, Wells Fargo's chief equity strategist, took a more cautious view. He said semiconductor and AI infrastructure stocks, which have led the market this year, are likely to face downward pressure for the time being.
He set a year-end S&P 500 target of 7,700. Kwon added that concerns about a slowdown in AI spending could instead help support shares of Alphabet and Amazon.
