Morgan Stanley expects US stocks to struggle to record new highs, as investors move to reduce their positions in chip stocks that have seen strong gains this year.

Bank analysts led by Michael Wilson said in a note carried by Bloomberg that momentum in chip stocks is beginning to fade, while investors are turning to stocks that have underperformed this year, led by giant cloud computing companies linked to artificial intelligence.

Volatile market

Wilson explained that major US indices may remain under pressure in the short term, with continued divestments from some of the largest companies listed on the indices, in a market characterized by volatility.

In the note, Wilson pointed out that he prefers investing in giant cloud computing companies over chip stocks in the near term, expecting major technology companies to start lowering capital spending forecasts on artificial intelligence.

Despite these pressures, Wilson maintained his forecast that the S&P 500 index will reach 8000 points by the end of the year, representing gains of nearly 7% compared to current levels.