Morgan Stanley goes against the trend: AI panic is overblown, the market is creating a "gold mine" for stock pickers.

The team of strategists at Morgan Stanley pointed out that the excessive selling in various industries caused by disruptive concerns about artificial intelligence is creating opportunities for investors to select individual stocks. Investors should focus on the team's definition of "AI in-position companies," strong growth stocks, and quality assets to capture the dual dividend of current undervaluation and the wave of technological proliferation. The strategy team led by Andrew Boake emphasized that the investment logic of adopters of AI technology with high pricing power is continuously strengthening. "The positive effects brought about by the widespread adoption of artificial intelligence in the short term can effectively alleviate anxiety about long-term disruptive changes in affected industries and the overall market," Boake wrote in the report. Although the software sector is one of the sectors most severely impacted by investor panic, the bank's strategists state that the market seems to have assumed that in-position companies struggle to effectively utilize AI technology to achieve innovative breakthroughs. Instead, the team believes that AI will expand the accessible market for enterprise software. Morgan Stanley analysts believe that companies such as Microsoft Corporation (MSFT.US), Intuit Inc. (INTU.US), and Atlassian (TEAM.US) have presented "attractive entry points." The Morgan Stanley team pointed out that as AI technology continues to evolve, the banking industry will be a net beneficiary of artificial intelligence this technology will gradually enhance production efficiency and profitability. The team further identifies Citigroup (C.US), Bank of America Corp (BAC.US), State Street Corporation (STT.US), and Truist Financial (TFC.US) as the "most defensively positioned" targets in the analyst's view. The team further analyzes that in other sectors, consumer finance stocks will also benefit from artificial intelligence short-term industry disruption effects will be offset by long-term efficiency improvements; in the insurance sector, although AI can gradually optimize brokerage business processes, short-term disruptive changes are difficult to achieve due to complex contract terms, regulatory frameworks, and compliance requirements. In the payments and financial technology sector, the bank's strategists believe that Mastercard (MA.US) and Visa (V.US) are net beneficiaries of artificial intelligence and agency businesses. "The current situation is a typical feature of a major investment cycle," Boake and his colleagues wrote in the report, "where the volatility usually significantly expands, and intermittent market stages occur in this process at this point, the market will question the pace of capital expenditure and which specific market areas may face risks of disruptive changes."