Generative artificial intelligence — or the usage of generative models powered by AI to generate text, images, or other media — is taking the world by storm and it’s not just the U.S. tech giants that are set to benefit, according to Morgan Stanley. In an Oct. 2 note, the bank’s analysts led by Adam Wood highlighted that the technology enables the automation of several categories of work and “is set to expand global software spending by [around] $150 billion in the next three years.” Morgan Stanley’s list of “winners in the AI era” in Europe includes companies ranging from software developers and internet operators to semiconductor players and IT service providers. The bank assessed the stocks on factors such as the complexity of their processes, the value and quality of their data, and cloud revenue exposure. The bank’s top picks for “best positioned” stocks include German software and solutions provider SAP and French software developer Dassault Systèmes . The bank is overweight-rated on both stocks and increased their price targets in the Oct. 2 note. It now has a target of 150 euros ($157.85) for SAP — giving it around 23% potential upside from its Oct. 4 close — and 44.50 euros for Dassault Systèmes, or around 26% upside. SAPA-FF YTD mountain Year-to-date performance of shares in SAP On SAP, Morgan Stanley’s analysts said the company is likely to “benefit from price increases in 2023” as well as better product integration which will enable “strong cross-selling.” DSY-FR YTD mountain Year-to-date performance of shares in Dassault Systemes Meanwhile, they like Dassault Systèmes for its “highly recurring software business models with growth.” As such, the counter “deserve[s] to trade at a clear premium to the sector/market,” the analysts said. Elsewhere, Morgan Stanley says the likes of Microsoft , Adobe and Nvidia make good plays of the AI trend. Generative AI helps improve productivity by automating routine tasks, such as data reporting and summarizing alerts, and frees up cyber security analysts so they can focus on more critical security concerns, Morgan Stanley said in a separate Oct. 1 note. So far, the bank said that generative AI “remains in the early stages of the opportunity,” based on data collected from recent funding activity and interviews with chief investment officers. — CNBC’s Michael Bloom contributed to this report.
Sumber: www.cnbc.com
