Morgan Stanley Raises U.S. Data Center Power Shortfall Forecast to 38 GW

Morgan Stanley raised its estimate of the U.S. data center power shortfall for 2026 through 2028 to 38 gigawatts, a shift that could affect chip market share and heighten overordering risks if construction slows.

The revised estimate is up from 33 GW. The firm said tight electricity supply could leave application-specific integrated circuit (ASIC) chips more vulnerable to losing share to graphics processing units (GPUs).

Morgan Stanley continues to favor Nvidia and Broadcom among semiconductor stocks. It cited chip shipment visibility, expansion in markets outside the United States and Nvidia’s higher token output per watt as reasons.

Nvidia shares rose more than 3% at one point Monday, and its market value reached $5.23 trillion. Broadcom shares gained more than 3.2%.

The forecast comes as the market tries to match projected data center capital spending of $1.5 trillion in 2027 and $1.6 trillion in 2028 with available electricity. If construction pauses or slows, storage, optical modules, power-management chips and analog chips could be more exposed to overorders tied to earlier shortages.