A quarter of the S&P now claims measurable AI benefits. Last year it was 14%
Wall Street has spent three years paying for the companies that build AI. It is starting to pay for the companies that use it.
The rotation has a number behind it. Morgan Stanley ran a systematic analysis of earnings call transcripts. It found that 25% of S&P 500 members cited measurable benefits from AI adoption in the second quarter. A year earlier the figure was 14%.
“The market is beginning to rotate toward quality, a classic mid-cycle transition as the business cycle matures,” wrote Mike Wilson, the bank’s top stock strategist, in a note reported by Business Insider. “From here, margin expansion is likely to depend less on early-cycle operating leverage and more on AI adoption.”
The bank expects roughly 100 basis points of net margin expansion through 2027 from adoption alone.
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