Morgan Stanley China Chief Economist Xing Ziqiang said in a recent media briefing that the latest volatility in the AI sector does not reflect a deterioration in fundamentals. Instead, he attributed the move to a combination of crowded positioning, fundraising by major technology companies draining liquidity, and higher oil prices lifting expectations for interest-rate hikes. Xing said AI investing has now entered what he described as a "mid-cycle pause." In his view, the market narrative is moving away from chasing the upstream end of the computing-power and chip supply chain. He said investors should now pay attention to two newer themes: the AI application layer, where the focus is on cost reduction and revenue realization, and HALO-related resource support, including energy, energy storage, and raw materials.
Odaily reported that Xing Ziqiang, Morgan Stanley China’s chief economist, shared his latest view at a recent media briefing, saying the recent swings in the AI sector do not point to weaker fundamentals.
He said the volatility came from a combination of crowded trades, liquidity being pulled by fundraising from major technology companies, and stronger oil prices that pushed up expectations for interest-rate hikes.
In Xing’s view, AI investing has entered a "mid-cycle pause." He said the investment thesis is shifting away from the upstream side of computing power and AI chips toward two new tracks: AI applications, with an emphasis on cutting costs and converting that into revenue, and HALO resource support, including energy, energy storage, and raw materials.
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