Morgan Stanley is providing up alternative routes to play synthetic intelligence past the same old tech “enablers” which have come to dominate investor consideration. A report issued Tuesday entitled “15 Ways to Play AI” anticipates a “broadening out of the AI theme over the remainder of 2024 and into 2025” and notable AI adoption in areas resembling gaming, schooling and biotechnology. The research, an outgrowth of Morgan Stanley’s know-how, media and telecom funding convention final week, highlights “the Tech Diffusion theme from all angles and all geographies.” “We continue to favour stocks that are early Adopters but also those where our analysts see greatest change of productivity uplift,” analysts led by London-based Edward Stanley wrote. The financial institution views the broadening out of AI occurring in a number of phases, beginning with “first-derivative” enablers resembling Microsoft , Meta Platforms and standard semiconductor names, earlier than transitioning into the “less crowded sub-themes.” Beneficiaries embody corporations which might be poised to get a productiveness increase from AI. Three areas — Smartphones and AI Edge, corporations powering Generative AI and the so-called early adopters — drew particular consideration based mostly on their upside potential relative to Morgan Stanley’s worth goal; development versus valuation; inventory efficiency up to now; investor positioning and focus danger; and anticipated “expansion in breadth” to mid-cap shares from large-caps, in accordance with the analysts. Within the close to time period, Morgan Stanley views “the Smartphone supply chain as the least well-discounted and most catalyst-rich way to play the theme,” whereas long run alternatives might emerge as PC/workstations allow the “growing Edge AI trend,” and robotics “play a major role in driving this sub-theme of AI over the remainder of the decade.” Firms offering the power for knowledge facilities and assembly the necessity for higher power effectivity ought to revenue as power use for these instruments grows to 4% of complete energy consumption by 2035 from 1% at the moment, whereas “early adopters” ought to expertise probably the most vital productiveness uptick, the analysts wrote. “We have argued both globally and more specifically in Europe, for investors to be positioned for more and upgraded data centre facilities to cope with the growing energy intensity of upcoming chips,” Stanley wrote. Towards this backdrop, listed below are a few of Morgan Stanley’s high picks as AI broadens out: A number of standard know-how shares made the checklist alongside AI mainstays resembling Nvidia , Microsoft and Alphabet . They embody Apple , Chinese language web inventory Baidu and Palantir Applied sciences . Apple shares have struggled 12 months up to now, falling 10% and underperforming 5 of the six different Magnificent 7 shares, partly due an obvious lack of a cohesive AI technique . The common analyst’s worth goal of $199, nonetheless, means that Apple shares can rally one other 15%. AAPL YTD mountain Apple shares for the reason that begin of 2024 Oracle additionally made the reduce. The data know-how inventory rallied nearly 12% Tuesday after posting stronger-than-expected quarterly earnings . The database software program supplier attributed a 12% rise in gross sales in its cloud providers and licenses assist phase to an increase in demand for AI servers. The inventory has now climbed 20% 12 months up to now. Morgan Stanley included office administration software program firm Asana on two of its AI lists, one in every of corporations which might be more likely to get a productiveness increase from AI, and one other that highlighted “Global Adopters” of AI. Asana slumped nearly 13% Tuesday after issuing gentle income steering, and has now fallen 15% to date this 12 months. ASAN YTD mountain Asana shares 12 months up to now Oil and fuel service supplier Baker Hughes , online game developer Take-Two Interactive , warehouse actual property funding belief Prologis and biopharmaceutical inventory AbbVie additionally made varied Morgan Stanley screens.