Morgan Stanley says a sell-off in artificial intelligence shares has gone too far as investors weigh the risk of slower U.S. data center construction, with some capacity potentially opening a year later than planned.
The bank estimates that about five gigawatts of U.S. capacity scheduled for 2028 may instead arrive in 2029. It expects those projects to proceed on a later timetable and says major cloud companies are broadly keeping their spending plans.
Morgan Stanley linked the market decline to election-related concerns about the pace of U.S. construction. In the bank’s view, a longer rollout could extend the AI investment cycle and support pricing. It favors Amazon, Microsoft, Meta and Google among potential AI beneficiaries and also sees opportunities in semiconductor, infrastructure and software companies.
Electricity supply presents a separate constraint. Morgan Stanley’s earlier estimate of the U.S. data center power gap put the potential shortfall at 32 gigawatts in 2028, about 34% of developers’ projected needs. That calculation included possible power from gas turbines, fuel cells and nuclear sources. The bank estimated the gap could widen to about 72 gigawatts in 2029.
The five-gigawatt estimate concerns when planned data center capacity becomes available. The power-gap estimate concerns whether developers can obtain enough electricity for their projects.
