In a recent report, Morgan Stanley delved into the rapidly evolving landscape of AI’s integration and its impact on various sectors. This comprehensive study, an update from their fourth-quarter 2023 survey, points to the shifts in AI exposure and materiality across a wide array of stocks, offering a detailed map of AI’s rate of change.
According to its findings, 337 stocks, representing over $11 trillion in market value, have changed their AI exposure categories.
This includes shifts in exposure from categories like “Adopter” to “Enabler.” For instance, Morgan Stanley notes that AI “is now more material to 97% of Utilities coverage,” signaling a substantial integration of AI technologies in this sector. This represents a dramatic increase from previous levels, reflecting the growing role of AI in enhancing operational efficiency and addressing power bottlenecks.
The study also notes that AI’s materiality to investment theses has increased significantly, with 446 stocks, worth $15 trillion, seeing changes in this regard. The increased importance is driven by AI’s potential to deliver operational efficiencies, productivity gains, and innovative solutions across industries.
“AI is becoming more material for the investment case,” the firm wrote.
Morgan Stanley emphasizes that measuring AI’s rate of change is crucial for identifying incremental alpha opportunities. Their global mapping effort, even at this early stage of AI diffusion, aims to provide a clearer understanding of these opportunities.
