Huberty notes that current price multiples are relatively low compared to the dot-com bubble, and earnings revisions for top tech companies have significant upside. She suggests that financial stocks are well-positioned to benefit from AI adoption and recommends exchange-traded funds like the Financial Select Sector SPDR Fund, Vanguard Financials ETF, and iShares US Financial Services ETF for investors seeking exposure. Huberty emphasizes that the impact of AI on efficiency is imminent, and the market is at a tipping point for broader adoption.
Key takeaways:
- The S&P 500's Shiller CAPE ratio is high, raising concerns of a stock market bubble similar to the dot-com peak in 2000.
- Katy Huberty of Morgan Stanley argues that the AI-driven bull market is just beginning, with significant investment potential in AI infrastructure.
- Huberty estimates $10 trillion will be needed for AI infrastructure investment, with current spending at only a small fraction of that amount.
- Financial stocks are seen as well-positioned to benefit from AI adoption, with ETFs like XLF, VFH, and IYG offering investment opportunities.