WALL STREET LOVES THIS CORNER OF THE STOCK MARKET AS AI TRADE FALTERS

What happened: Wall Street analysts are recommending quality stocks as the AI trade falters, citing rising interest rates and concerns about AI spending. Morgan Stanley, Goldman Sachs, Piper Sandler, and Manulife John Hancock Investments all endorsed the quality factor in recent notes. Key numbers: Morgan Stanley Why it matters: Analysts expect quality stocks to outperform as higher-beta stocks appear to have topped out by historical standards. Some investors are shifting into quality names within the AI trade, such as large hyperscalers and chip stocks with durable competitive advantages.

Wall Street analysts are recommending quality stocks as the AI trade falters, citing rising interest rates and concerns about AI spending. Morgan Stanley, Goldman Sachs, Piper Sandler, and Manulife John Hancock Investments all endorsed the quality factor in recent notes.

Analysts expect quality stocks to outperform as higher-beta stocks appear to have topped out by historical standards. Some investors are shifting into quality names within the AI trade, such as large hyperscalers and chip stocks with durable competitive advantages.