Key takeout
- Morgan Stanley estimates that AI adoption could translate to approximately $920 billion of annual net profits for S&P 500 companies, but it could take years to achieve, with a major risk that the profits would not be fully realized.
- According to Morgan Stanley, AI can address labor market shortages “not killing jobs.”
- Wells Fargo Economist says the “high-tech” category currently represents a modest portion of US manufacturing, but is poised to expand.
Artificial intelligence is given and taken away, but this may be more common in the former than in the latter.
Morgan Stanley estimates that annual net economic benefits could be around $920 billion in AI adoption alone, or about 28% of the estimated consensus end-of-early revenue for the S&P 500 in 2026 after implementation costs. This would range from $13 to $16 trillion in creating market value. However, the company's analysts point out it will take years to achieve, and there is a great risk that companies are not aware of the benefits of full recruitment.
That economic value creation is expected to come from a mix of cost reductions and new revenue and margin generation, Morgan Stanley strategists, including Stephen Bird, wrote in the report. This value is expected to come from almost even divisions between agent AI or software, and embodied AI, human-like robots.
The adoption of new technologies, including artificial intelligence, can be net positive for the job market, for each analyst and economist, despite fears of becoming obsolete or becoming Fobo.
Although work can be moved, underlying labor market trends point to half of glass. “AI may address the shortage of workers, rather than killing jobs,” analysts wrote in the report.
Consider comparable influential technological advances, including the adoption of computers, which brought employment influx of computer scientists and programmers in the 1990s, resulting in the biggest decline in secretaries, bookkeepers, accountants and auditors, the report says.
Microsoft applied quantitative analysis to use a dataset of 200,000 anonymized conversations between users and their publicly generated AI system Bing Copilot to identify the fewest jobs in AI. The jobs most exposed to AI include the brain and the least exposed courage.
Spending on new technology, put together in software. Research and Development; Information Processing Equipment; Wells Fargo Economists prioritizes the construction of manufacturing facilities – its cutting edge investments over any other category, writing in a report published Monday. By analyzing spending on equipment alone, they said, it shows that businesses will make a down payment for the “high-tech future” and allocate more information to information processing than transportation and industrial equipment.
“This may just be the beginning of the high-tech production boom,” wrote the company's economists Shannon Grain and Tim Kinlan. “High-tech currently accounts for around 3% of the US domestic manufacturing industry, but today it is growing capacity as the types of factories built in the US.”
