It's too late to buy utilities — a red-hot AI play — except for 2 stocks, says top Morningstar strategist

Utilities stocks have been a red-hot play off the artificial intelligence boom, with AI leading to the need for much power. The Vanguard Utilities ETF, for instance, has soared nearly 21% year-to-date, more than the S & P 500's 18%. But the sector has now run too far, according to Morningstar's Dave Sekera. He said Morningstar recently changed its recommendation for the utilities sector to an underweight rating from an overweight one at the start of the year.

"Of course, artificial intelligence chips require multiple times more power than just traditional chips, but that's already priced into those stocks at this point," he said. At this point, these stocks are already up around 21% year-to-date, with the sector trading at an 8% premium over the fair value estimate that Morningstar gave it, Sekera said.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

'Long-term opportunity': Morningstar analyst names 2 luxury stocks to buy right nowAmid a broad sell-off in luxury stocks, one Morningstar analyst sees promise in the sector, revealing her top picks.
Source: CNBC - 🏆 12. / 72 Read more »

Morningstar analyst names 2 under-the-radar global stocks with big potential'Long-term I think there is ... good potential in the adjacencies to luxury,' Jelena Sokolova says.
Source: CNBC - 🏆 12. / 72 Read more »