Morgan Stanley’s Top 16 AI-Fueled Stock Picks

Morgan Stanley’s Top 16 AI-Fueled Stock Picks
Stéphane Renevier, CFA

about 1 month ago2 mins

Mentioned in story

Last year was the year of AI enablers – the creators and innovators of the technology. This group – including tech giants like NVIDIA, TSMC and Baidu – saw their collective market cap rise by more than $6 trillion in 2023 and saw their share price rise by an average of +111%.

But, according to Morgan Stanley, this year is likely to belong to the AI adopters – the smart users of AI tech. They’re ready to reap the benefits of heightened productivity and new revenue streams as they integrate the tech into their businesses. And with a third of CIOs expecting their first AI and large language model (LLM) projects to be in production in the second half of the year, there’s likely to be quite a few of them.

Several have already caught Morgan Stanley’s eye – and they’re not the kind of AI plays that usually spring to mind. Here are its top picks.

  • Old-school financial firms like American Express, JPMorgan, Regions Financial, and Wells Fargo stand to gain as they leverage AI for advanced credit decision-making, fraud detection, risk management, and operational efficiencies.
  • In the energy sector, Baker Hughes and Schlumberger are deploying AI-based solutions for oil field and industrial markets.
  • Media companies Sony and Trade Desk are using AI for content creation, advertising optimization, and gaming innovations.
  • Healthcare giant UnitedHealth Group is utilizing AI for administrative simplification, data science platforms, and improved healthcare services.
  • And carmaker Kia is adopting AI for expanding software-defined vehicle capabilities.
  • Plus, RELX, S&P Global, Wolters Kluwer, Experian, FUJIFILM, and SAP are incorporating AI tools into their businesses in various ways.

And these stocks may be worth keeping an eye on. After a lackluster 2023 – they gained just 6% as a group – they could be ready for a shiny breakout year, with Morgan Stanley forecasting a solid 27% return.

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