Morgan Stanley supports technology stocks: AI investment cycle fluctuations do not change strong fundamentals, rebound still has momentum.

Morgan Stanley strategist stated that due to the hype of artificial intelligence supporting strong sales prospects, there is further room for growth for US tech stocks. The team led by Michael Wilson stated that the revenue growth expectations for large tech stocks have reached "the highest level in decades", and after recent market fluctuations, their valuations have dropped. At the same time, the sharp decline in software stocks has created "highly attractive buying opportunities" for some stocks like Microsoft Corporation (MSFT.US) and Intuit Inc. (INTU.US). Wilson wrote in a report, "Periods like last week are not uncommon in major investment cycles. Nevertheless, the fundamentals of the AI empowerment industry remain strong, and we believe the value of the AI adopters market is still undervalued." Wilson's views may reassure investors who have started to question the substantial returns on investment in the field of artificial intelligence. Last week, the Nasdaq 100 index experienced its largest weekly decline since December last year, with stocks that were thought to be vulnerable to AI impact falling after the release of Anthropic's new tool. The "Seven Tech Giants" index currently has a P/E ratio of around 29 times, slightly lower than the five-year average. Some bargain buyers entered the market last Friday, but market trends indicate that this situation may only be temporary, with Nasdaq 100 index futures falling by 0.7% on Monday. According to the analysis of Wilson's team, investors have not yet strengthened constraints on capital expenditures in a more structural way. The strategist stated that stocks with a high ratio of capital expenditures to sales continue to outperform the market. He also believes that companies applying artificial intelligence to their core business, rather than companies developing technology and infrastructure, have more opportunities. Wilson stated that the former typically outperforms the market by 1% after releasing earnings reports on the second day. His team also pointed out that the weak US dollar has boosted Nasdaq 100 index component stocks, as about half of these companies' revenues come from international markets. They also anticipate a more widespread rebound with earnings expectations being raised in sectors such as semiconductors, software, tech hardware, and the "Seven Tech Giants".