Morgan Stanley expects higher profit margins for companies that expand the use of artificial intelligence

Analysts at the US investment bank Morgan Stanley said that companies that integrate artificial intelligence technologies into their operations are eligible to achieve higher profit margins.

The team of analysts, led by Michelle Wilson, said in a report issued by the bank that profit margin expectations are “witnessing a clear improvement” among companies that have made artificial intelligence the focus of their investments, and that have pricing power that ranges between medium and strong. He added that about 100 basis points of companies’ net profit margin over the next year will be linked to the adoption of artificial intelligence technologies.

Bloomberg News quoted Wilson as saying in the report: “The prospects for companies adopting artificial intelligence have become more attractive. This is particularly important because many of the industries most vulnerable to the effects of artificial intelligence, including transportation, software, services, and professional services, are also among the sectors that most benefit from the use of this technology.”

Bloomberg noted that an analysis by Morgan Stanley’s expert team showed that stocks of companies such as Halliburton, Bank of America, CVS Health, and NextEra Energy are among the most prominent beneficiaries of adopting artificial intelligence.

She added that companies such as Alphabet, MetaPlatforms, and Nvidia, which benefited from the first wave of the AI-driven rally, still have strong ratings in Wilson’s analysis.

While artificial intelligence trends are still among the main drivers of the US stock market, investors have become more selective in choosing companies that are candidates to benefit from this technology, amid fears that some major companies are overspending on artificial intelligence investments.