Morgan Stanley's Global Head of Research, Katy Huberty, highlights that AI adoption is at a "tipping point," with businesses beginning to leverage the technology to enhance profitability. Companies with strong pricing power, which allows them to maintain or increase prices due to high demand, are expected to benefit the most from AI investments. Huberty advises clients to focus on pricing power to retain productivity gains without passing costs onto customers, marking a continuation of a secular bull trend in AI.
Huberty's team identified 20 high-market-cap stocks that have adopted AI and possess strong pricing power. These companies span various sectors, including Consumer Discretionary, Healthcare, Industrials, Energy, and Communication Services. The list includes prominent names like Home Depot, Thermo Fisher Scientific, Intuitive Surgical, and Deere & Co., among others, with market caps ranging from $22.3 billion to $414.3 billion.
Key takeaways:
AI adoption is at a "tipping point," according to Morgan Stanley's Katy Huberty.
Companies with strong pricing power will benefit the most from AI investments.
Huberty's team identified 20 high-market-cap stocks with strong pricing power that have adopted AI.
The list includes companies from various sectors such as Consumer Discretionary, Healthcare, and Industrials.
