The Undervalued Companies Benefiting from AI

AI investing is broadening from technology enablers toward undervalued adopters and companies relieving data-center bottlenecks.

• Morgan Stanley Research mapped approximately 3,600 globally covered stocks to assess how AI exposure affects earnings across sectors.
• Enablers still have the strongest earnings momentum, but adopters are showing a meaningful fundamental inflection as AI-driven productivity and revenue gains emerge.
• The median forward P/E for adopters has fallen to 18, broadly in line with the MSCI World and below the 22 multiple for enablers, improving their risk/reward.
• AI exposure is spreading into real estate, autos, consumer durables, transportation and consumer services, while deeper investment relevance remains concentrated in software, semiconductors, utilities and media.
• Computing demand is expected to exceed supply for years, with energy, labor and regulatory constraints creating opportunities for power companies, selected semiconductor and infrastructure firms, early software enablers and adopters.

Takeaway: Over the next six to 12 months, investors should retain selected enablers with durable earnings while adding adopters whose longer-term AI benefits are not fully reflected in consensus expectations; late-stage software enablers and service companies may benefit later.