Wells Fargo is no longer telling investors to stay away from the AI infrastructure trade. In a new note, analysts led by Ohsung Kwon raised the firm’s view on US AI infrastructure to neutral from negative.
The change follows a deep selloff. Semiconductor shares trade about 38% below their June highs, and the multiples investors pay for them have compressed. At current prices, the analysts said, valuations imply earnings growth of only about 8% a year.
A compressed multiple means investors...