Morgan Stanley Identifies 20 Stocks Benefiting from AI Adoption

Katy Huberty, the Global Head of Research at Morgan Stanley, has highlighted 20 companies positioned to gain significantly from the growing use of Artificial Intelligence (AI).

Key Developments: Huberty has pointed out that we are at a decisive moment for AI adoption in the business sector. She emphasized that companies that implement AI to enhance their profitability are on the edge of experiencing substantial gains.

In a discussion with Business Insider earlier this month, Huberty remarked on the importance of pricing power for businesses. She noted that companies that can maintain or even increase prices due to heightened demand will observe the most pronounced effects on their profit margins.

"Pricing power enables companies to retain the productivity gains that come from their AI investments without shifting those costs onto consumers," she explained.

Huberty's team compiled a list of 20 AI-empowered companies in a note to clients. These stocks all have market capitalizations exceeding $20 billion and belong to businesses that are both using AI and possess strong pricing power. The notable companies on this list include The Home Depot, Inc. (HD), Thermo Fisher Scientific Inc. (TMO), and Intuitive Surgical, Inc. (ISRG), along with Deere & Co. (DE), Spotify Technology (SPOT), MercadoLibre Inc (MELI), Marriott International Inc (MAR), Hilton Worldwide (HLT), PACCAR Inc (PCAR), Schlumberger NV (SLB), Johnson Controls International PLC (JCI), Axon Enterprise Inc (AXON), Coupang Inc (CPNG), Baker Hughes Co (BKR), Experian PLC, Delta Air Lines Inc (DAL), IDEXX Laboratories Inc (IDXX), United Airlines Holdings Inc (UA), and Halliburton Co (HAL), among others.

Importance of AI Adoption: The discussion around AI's role in transforming how businesses operate has gained momentum in recent years, as various sectors recognize its potential to enhance efficiency and drive profits.

Huberty’s identification of these 20 stocks sheds light on the increasing relevance of AI in today’s business environment. Companies that can effectively harness AI technologies have the opportunity to gain a significant competitive advantage, especially those that hold strong pricing power.

This shift may also influence how investors approach their investment strategies, directing attention towards corporations that are advancing in AI adoption as promising investment opportunities.

AI, Stocks, Profitability