MS · News · 20261102N

AI Investment Outlook

MORGAN STANLEY · 2026-11-02 · Importance 17 · Surprise 24

According to Morgan Stanley, hedge funds reduced exposure to the broader AI sector to an underweight position for the first time since early 2023. The shift marked the longest period of portfolio de-risking in more than 15 years. The report linked the move to concerns that massive AI infrastructure investments were not producing returns quickly enough, alongside disappointing earnings from major technology companies. Despite some equity buying attributed to short covering, overall leverage remained low, which the report said indicated managers were reducing book size rather than deploying new capital.

Key facts

• Morgan Stanley MUFG Securities will handle orders for the Japanese portion of Anthropic's planned U.S. IPO, which may raise up to $3.5 billion from Japanese investors. source
• Meta asked Morgan Stanley to hold investor calls on Monday and Tuesday for a potential cross-border investment-grade bond offering; according to a person familiar with the matter, the offering may include U.S. dollar bonds in five parts and euro-denominated notes in six parts. source