logo
3 parts of the market where AI hype is turning into real returns, according to Morgan Stanley

3 parts of the market where AI hype is turning into real returns, according to Morgan Stanley

Google
AI investments are starting to deliver as adoption gains momentum, Morgan Stanley says.
Financials, real estate, and consumer sectors show significant increases in AI adoption.
AI adopters are leading the stock market rally with more positive earnings revisions as well.
Investors have been eager to know if the billions of dollars of AI investment are actually delivering a return for companies. Morgan Stanley thinks the answer is yes.
The bank's latest version of its AI Adopter survey shows that AI exposure and adoption are clearly gaining steam.
Over the last few months, the financials sector has seen AI-related gains. Among insurance companies, the amount of adopters increased from 48% to 71% since January 2025. For financial services companies, the amount of adopters increased from 66% to 73% in that same period.
"In our proprietary survey of 400 companies adopting GenAI into their products, Financials companies showed the greatest amount of low-hanging opportunities across both cost and revenue lines," the bank wrote in its July 2025 edition of the AI Adopter survey.
Morgan Stanley
Companies in the sector have been investing heavily into AI capabilities to automate customer service and enhance risk and compliance protocols.
Additionally, the real estate and consumer sectors showed the biggest rate of change in terms of AI adoption.
Morgan Stanley found that almost 30% of consumer durables and apparel stocks increased their AI exposure, or their involvement with AI technologies. Around 10% of these consumer stocks experienced an increase in AI materiality, meaning that AI became more important to these stocks' core investment thesis.
Overall, the percentage of consumer durables and apparel companies that Morgan Stanley qualifies as AI adopters increased from 20% to 44%. A large part of the AI adoption within the consumer sector comes from supply chain optimization — for example, retailers like Target and Walmart are using the technology to manage inventory.
In the real estate sector, 32% of REITs are now more exposed to AI than they were in January. Roughly 37% of tasks across 525,000 roles in the public REIT and commercial real estate services sector could be automated, according to Ron Kamdem, Morgan Stanley's head of U.S. REITs and commercial real estate research. Leasing services, property management, and risk management are all areas in real estate that can be made more efficient by AI, with the biggest gains coming from automation in the brokers and services segment of the real estate industry.
Companies that are exposed to AI are noticeably pulling ahead of those who haven't integrated the technology when it comes to earnings revisions, the bank added.
"There are clear signs of alpha from AI materiality among companies — this can be seen in relative price performance and earnings revisions," Morgan Stanley analysts wrote.
Morgan Stanley
Going forward, the gap between companies that have successfully adopted AI and those that have not will only continue to grow.
As the stock market continues to trend upward amid higher earnings revisions, AI adopters with high pricing power are leading the rally with higher earnings revisions, while companies disrupted by AI are seeing negative revisions, Morgan Stanley said.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Google Photos Introduces New AI Tools: Fun, Free, And Very Limited
Google Photos Introduces New AI Tools: Fun, Free, And Very Limited

Forbes

time2 minutes ago

  • Forbes

Google Photos Introduces New AI Tools: Fun, Free, And Very Limited

Google is adding new generative AI tools to Google Photos, shifting the app away from its original ... More purpose. Key Takeaways Google Photos could be at the start of a radical transformation. In a major update rolling out now, Google is introducing what could be the most significant Google Photos AI upgrade yet, allowing you to turn static images into animated video clips and stylized art with just a few taps. The tools are free and fun, but are deliberately and severely limited -- and in many ways, that's a good thing. Google's Remix feature turns still images into fun videos with AI. The Big Update: Photo To Video — Fun But Deliberately Nerfed As I previously reported, Google Photos is introducing a game-changing new feature that transforms still photos into short video clips with a single tap. It's a powerful, but significantly cut-down version of the photo-to-video features already available to paying Google AI Pro and Ultra subscribers in Gemini. You can select any picture in your Google Photos library, choose between the vague 'Subtle movement' or slot-machine-like 'I'm feeling lucky' options, and wait for about a minute for the video animation to generate. FEATURED | Frase ByForbes™ Unscramble The Anagram To Reveal The Phrase Pinpoint By Linkedin Guess The Category Queens By Linkedin Crown Each Region Crossclimb By Linkedin Unlock A Trivia Ladder Google's demos show once static people now celebrating by throwing handfuls of confetti in the air before it tumbles back down from above. These were both generated in 'I'm feeling lucky,' mode. I presume additional video effects will be available at launch and more added in the future. If you don't like the results, you can hit the Regenerate button to try again, but that's about it for user control. You can also tap on thumbs-up or thumbs-down icons to send feedback to Google. It would be great to see a few more preset options available, beyond just subtle movements or a random effect. Even adding just a few more emotions would make these clips useful as fun reactions for messaging apps, etc, in place of emojis or pre-made GIFs. The process takes up to a minute to complete, and you The focus here is clearly on fun rather than unbridled creativity. Where Gemini utilizes Google's powerful Veo3 video AI model to create animations of anything you want, Google Photos employs the older Veo 2 model, offering very little user control over what happens in the animation, except for repeatedly hitting the 'Regenerate' button. Furthermore, Veo 2 cannot generate audio, one of the standout features of Veo 3. Remix Your Photos — Too Little, Too Late? First discovered in May of this year, the new 'Remix' feature allows you to select a photo and transform it into a range of artistic styles, including cartoons, pencil sketches, and paintings. Google Photos Remix feature lets you transform photos into a range of artistic styles. As with the Photo to Video feature above, you can hit Regenerate to re-try any pictures you don't like and tap one of the thumb icons to provide feedback. Remix is clearly aimed at having fun and sharing moments in new ways, and there's nothing wrong with that. The results are Google's answer to the viral 'Ghliblified' images and action figure pictures you've probably seen taking over social media. However, unlike powerful tools like ChatGPT or Midjourney where you can simply type in any style imaginable, Remix forces you to pick from a small menu of pre-selected styles. The approach helps keep generated output safe for consumption, but also prevents any real creativity. Google will need to update the library of styles frequently or the novelty will wear off quickly. A New Direction For Google Photos — The Create Tab To make Google Photos' new generative tools easier to find, Google is introducing a new 'Create' tab, accessible by clicking an icon at the bottom of the app on both Android and iOS. Here, you'll be able to find all of Google Photos' creative tools gathered in one place, effectively separating the newer creative side of Google Photos from its original library functions. Google Photos introduces a new "Create" tab to house all of its new generative AI tools. This marks the beginning of a significant shift in purpose for Google Photos, as Google notes, it's now 'more than an archive, it's a canvas.' Personally, that's not what I want from Google Photos; I use it as a place to store and revisit memories rather than as a tool to create new content. The app's existing Animated slide shows and collages use AI to enhance memories, but these new tools alter them into something entirely new, creating video clips of events that never really happened. Google Photos Now Creates, But Is It Safe? Google appears to be exercising considerable caution with these new features, not least by severely limiting the scope of what can be created with these new Google Photos tools. However, the company acknowledges that the results may be 'inaccurate or unexpected' and displays a warning before use, along with a link to its GenAI prohibited use policy. Furthermore, all images and videos generated by Google Photos using AI contain invisible SynthID watermarks that reveal their synthetic origins. The Big Issue: US-Only Rollout Alienates Global Users Photo to Video and Remix are now rolling out on Android and iOS, but are currently only available in the US. The Create tab will then roll out in August, but once again, only in the US. This will be disappointing for international users, who may have to wait a considerable amount of time to access the new features. Remember, Google Photos users outside the US are still waiting for access to the AI-powered 'Ask Photos' feature nine months after launch. Google Photos has a massive worldwide user base, with billions of photos and videos uploaded each week, and runs the risk of frustrating a colossal number of customers if non-US customers remain excluded from its best features. Follow @paul_monckton on Instagram.

Samsung reveals a mysterious $16.5 billion chip deal.
Samsung reveals a mysterious $16.5 billion chip deal.

The Verge

time2 minutes ago

  • The Verge

Samsung reveals a mysterious $16.5 billion chip deal.

Chip race: Microsoft, Meta, Google, and Nvidia battle it out for AI chip supremacy See all Stories Posted Jul 28, 2025 at 3:04 AM UTC Follow topics and authors from this story to see more like this in your personalized homepage feed and to receive email updates. Richard Lawler Posts from this author will be added to your daily email digest and your homepage feed. See All by Richard Lawler Posts from this topic will be added to your daily email digest and your homepage feed. See All Business Posts from this topic will be added to your daily email digest and your homepage feed. See All News Posts from this topic will be added to your daily email digest and your homepage feed. See All Samsung Posts from this topic will be added to your daily email digest and your homepage feed. See All Tech

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store