Morgan Stanley Flags Major Turn in the AI Trade

This article first appeared on GuruFocus. Hedge funds have turned underweight the broader artificial-intelligence trade for the first time since early 2023, according to Morgan Stanley, marking a major reversal after years of heavy positioning in AI-linked stocks. Warning! GuruFocus has detected 5 Warning Signs with MS. Is MS fairly valued? Test your thesis with our free DCF calculator. The shift follows the longest sustained stretch of hedge-fund de-risking in more than 15 years. Morgan Stanley Prime Brokerage data showed cumulative gross hedge-fund flows have fallen 8% from their June peak, as managers repeatedly cut exposure through the summer and October selloffs without rebuilding positions in between.