The investment narrative surrounding artificial intelligence is entering a new phase. After two years dominated by semiconductors and data centers, Morgan Stanley suggests that the next major opportunity lies with companies that can leverage the technology to drive efficiency and productivity.
Infrastructure Spending Remains Massive
Despite the emerging focus on application, capital flows into hardware remain substantial. Morgan Stanley Research estimates that AI-related capital expenditures (capex) will reach approximately $800 billion in 2026, climbing to $1.1 trillion by 2027. While the infrastructure story continues, a broader field of value creation is beginning to surface beyond physical assets.
The Gap Between Adoption and Integration
According to the Stanford AI Index 2026, organizational AI adoption has reached 88%. However, a study of S&P 500 firms revealed that by 2025, only about one in five companies had moved to the next stage, having AI in production or deeply embedded in business processes. Morgan Stanley emphasizes that moving from simply using AI to profiting from it requires "intangible capex," which includes:
- Data preparation and organization
- Cybersecurity and corporate governance
- Employee training
- Redesigning business workflows
The Productivity "J-Curve"
Morgan Stanley points to the "J-curve" of productivity, a pattern where companies initially spend time and capital on reorganization, meaning costs precede the eventual surge in profits. Nevertheless, measurable returns are starting to appear. By July 2026, 25% of S&P 500 companies reported at least one quantified impact from AI use, up from 15% in the third quarter of 2025.
Key sectors poised for growth include financial services, where AI can automate document-heavy tasks; healthcare, through improved clinical documentation and drug development; and retail, where the technology can optimize inventory management and logistics.
