The artificial intelligence boom that powered the S&P 500 Index to record highs earlier this year is fizzling out, so the stock market needs a new catalyst if the rally is going to resume, according to Morgan Stanley’s Mike Wilson.
While AI could very well transform productivity over time, investors who bid up equities on its potential in the short-term were premature, the bank’s chief US equity strategist said Wednesday in an interview with Bloomberg Television. Now it’s showing up in struggling chip stocks, and not just poster child Nvidia Corp.’s recent swings, he added. The Philadelphia Semiconductor Index is down 8.5% this month.