Morgan Stanley Favors Mega-Cap Cloud Companies Over Chip Stocks, as Cloud Gains 30% in Three Weeks

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According to Morgan Stanley's strategy team led by Mike Wilson, on July 21, the firm prefers mega-cap cloud computing companies over semiconductor stocks in the coming months, despite cloud stocks already rising approximately 30% relative to chip stocks over the past three weeks. The bank noted this recent outperformance has reduced the risk-reward ratio for cloud names. Morgan Stanley maintained its year-end S&P 500 target of 8,000 points but warned the index could fall to around 7,000 if momentum trading reverses or Middle East tensions escalate further.
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