Wells Fargo upgrades US AI infrastructure stocks to neutral after chip rout

Agencies Wells Fargo upgraded its view on US artificial intelligence infrastructure companies to “neutral” from “negative,” saying a sharp decline in semiconductor stocks had improved the sector’s risk-reward profile despite persistent concerns about slowing AI investment, Reuters reported. Semiconductor shares have fallen about 38% from their June highs, while valuation multiples have contracted significantly. The brokerage said current prices already reflect much of the expected slowdown in AI-related earnings growth. US Markets Powered By As on 11 Nov 2026, 02:17 AM IST S&P 500 Top Gainers Charter Communications 134.52 (10.99%) Take-Two Interactive 224.95 (8.46%) Akamai Technologies 84.23 (4.90%) Global Payments 101.94 (4.27%) Gainers » S&P 500 Top Losers Coterra Energy 32.56 (-8.62%) Moderna 252.30 (-6.21%) NVIDIA 168.28 (-5.82%) First Solar 180.97 (-5.55%) Losers » Also read: Traders raise odds of 50 bps Fed rate hike as CPI rise exceeds expectations “Risk-reward is reasonable,” analysts led by Ohsung Kwon said in a note on Monday. Current semiconductor valuations imply annual earnings growth of roughly 8%, according to Wells Fargo. Live Events Democratic victories in last week’s US midterm elections, including in states where opposition to new data centres has increased, fuelled concerns that tighter regulation could slow the AI infrastructure buildout. The resulting sell-off erased about $3 trillion from the market value of S&P 500 companies. However, Wells Fargo warned that markets have not fully priced in the risk of an earnings downturn in 2028 as capital spending peaks, supply increases and depreciation costs rise. For live updates on US Markets, click here The brokerage estimates that AI-related investment added about eight percentage points to S&P 500 earnings growth over the past year. “The tailwind is expected to continue in 2027,” the analysts said, but it could largely disappear in 2028 as spending growth slows and depreciation expenses increase. (Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times) Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our ETMarkets WhatsApp channel ) Read More News on Wells Fargo AI infrastructure stocks semiconductor stocks artificial intelligence investment Nvidia stock AI capital expenditure semiconductor valuations S&P 500 earnings AI investment slowdown (What's moving Sensex and Nifty Track latest market news , stock tips , Budget 2025 , Share Market on Budget 2025 and expert advice , on ETMarkets . Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today . Top Trending Stocks: SBI Share Price , Axis Bank Share Price , HDFC Bank Share Price , Infosys Share Price , Wipro Share Price , NTPC Share Price ... more less (You can now subscribe to our ETMarkets WhatsApp channel ) Read More News on Wells Fargo AI infrastructure stocks semiconductor stocks artificial intelligence investment Nvidia stock AI capital expenditure semiconductor valuations S&P 500 earnings AI investment slowdown (What's moving Sensex and Nifty Track latest market news , stock tips , Budget 2025 , Share Market on Budget 2025 and expert advice , on ETMarkets . Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today . Top Trending Stocks: SBI Share Price , Axis Bank Share Price , HDFC Bank Share Price , Infosys Share Price , Wipro Share Price , NTPC Share Price ... more less Prime Exclusives Investment Ideas Stock Report Plus ePaper Wealth Edition Business of Odd Things: The farm that needs no land, freshwater, or fertiliser KYC and KYB: Inside Pidilite, the company that turned Fevicol into a word for a strong bond – Part 1 of 3 Seoul halts trading, Nifty has its best week since 2021: Money leaving the AI trade – will it land in India? Junk bonds are cracking at the bottom. Will the noise get loud enough to make ‘junk bond’ a household term again? PNG connections rise half a million, but how many use piped gas for cooking? Some elections matter more than you know: No crop changed in the fields, yet sugar, coffee and soya got cheaper in a day 1 2 3 View all Stories