Investor interest in artificial intelligence has soared over the last year-and-a-half following the release of ChatGPT in late 2022.
So far, much of the interest has been concentrated in the market’s largest companies and leaders in AI development, like Nvidia, Alphabet, and Microsoft.
But according to Morgan Stanley, the AI theme in stocks will continue to broaden out to smaller names who are helping to grow the technology or will continue to benefit from it.
“We – and companies presenting at our TMT conference last week – expect a broadening out of the AI theme over the remainder of 2024 and into 2025,” the bank said in a March 12 note. “There are 15 main groupings of companies from first-derivative ‘Enablers’ to less crowded sub-themes that are beginning to come to the fore.”
Some of the 15 sub-themes that Morgan Stanley believes will continue to grow include AI in smartphones, AI in biotech, AI in education, AI in healthcare, global data centers, AI enablers, AI supply chain, and more.
In the note, the bank listed 480 stocks across the sub-themes that their analysts believe will benefit from AI. Below, we’ve compiled the 17 stocks which the analysts think have at least 70% upside from their March 12 levels.
The stocks are listed by sub-theme, and analysts’ ratings are included. An “Overweight” means investors should allocate a higher percentage of their portfolio to a stock than its weighting in its respective benchmark index, like the S&P 500. “Equal-weight” means it should have the same weighting as it does in its index.
Read More: These 17 AI Stocks Have 70%-295% Upside, Morgan Stanley Says