TradingKey - Meta ( META) recently proposed to launch a cloud infrastructure service named "Meta Compute," planning to sell surplus AI computing power to external customers and considering allowing developers to access AI models hosted on Meta's infrastructure. Affected by this, Meta closed up 8.81% on the day at $612.91. At the same time, major cloud vendors such as Amazon ( AMZN ), Alphabet ( GOOGL ), and Microsoft ( MSFT) all saw weekly gains exceeding 4%. Just in the preceding two months, concerns over high valuations had caused the stock prices of these tech giants to decline continuously.

Morgan Stanley stated that as investors take profits on tech stocks that have led the gains this year, the US stock market will find it difficult to reach new highs.

The institution stated that the market is currently experiencing a "rotation from high to low," with funds moving toward AI hyperscale cloud computing vendors, while the upward momentum of semiconductor stocks is visibly weakening. It added that this core group of vendors includes Microsoft, Amazon, and Meta, companies with solid core businesses, strong positions in the AI ecosystem, and highly attractive allocation value.

Although the AI sector remains the consensus main line of this round of the US bull market, concerns such as high sector concentration, continuously rising valuation premiums, and the questionable efficiency of earnings realization from massive AI capital expenditures are continuing to ferment.

Micron ( MU) disclosed earnings last month that significantly exceeded market expectations, yet failed to drive the chip sector to continue its upward trend. The market is currently entering an AI demand validation window, with investors waiting for the latest operating data from leading companies like Nvidia ( NVDA) to further confirm the true demand resilience of AI chips.

Morgan Stanley stated that in the short term, it is more bullish on the valuation attractiveness of hyperscale cloud computing vendors and relatively bearish on the semiconductor sector. It also expects that, driven by relatively lagging stock performance in the previous period, leading cloud vendors are highly likely to see subsequent downward revisions in consensus market expectations for their capital expenditures.

This type of market outlook is forming a consensus among Wall Street investment banks. HSBC's latest strategy assessment points out that the market will experience a summer melt-up in July and August, with the hyperscale cloud technology sector serving as the core recovery force.

From May to June, the cloud computing vendor sector suffered a cumulative decline of over 20%, with leaders like Microsoft, Meta, and Amazon all experiencing double-digit drawdowns. This digested previous valuation bubbles and also drove a significant downward revision in market earnings expectations. Current market sentiment has shifted from euphoria to caution, and the room for further downside has been substantially compressed.

HSBC stated that even against the backdrop of massive capital expenditures on AI infrastructure, leading companies still maintain strong profitability, and fundamentals have not weakened in tandem with stock prices. More importantly, the monetization path of AI investments is gradually becoming clearer. Meta's business layout of selling surplus computing power externally validates the possibility of AI infrastructure transitioning from a pure cost center to a revenue driver. Once this logic continues to be realized, it will become the core driver for the sector's long-term gains.

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