The artificial intelligence trade has evolved to intently focus on adoption. So there’s been considerable chatter regarding the extent to which companies will embrace AI. In this case, “extent” means how much firms will spend to tap this disruptive technology.
It’s also been widely noted that AI products and services, including those purveyed by some members of the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM), aren’t cheap. That means adopters need to have compelling reasons to commit to pricey expenditures. Those reasons aren’t hard to find. Consider new findings from Morgan Stanley.
Stephen Byrd, global head of sustainability research at the bank, estimates S&P 500 member firms could realize $920 billion in long-term value by leaning into AI. Furthering the case for QQQ and QQQM — two AI-heavy ETFs — Byrd forecasts AI could reduce compensation costs by 40% over the long haul. That would result in the potential addition of $13 trillion to $16 million in market value for S&P 500 components.
An Array of AI Adoption Possibilities
Obviously, tech and communication services, the two biggest sector weights in QQQ and QQQM, are chock full of AI enablers and some adopters, too. But artificial intelligence adoption isn’t a tech-only theme. To date, financial services and healthcare, as just two examples, have become fertile territories for AI adoption.
In what could be positive news for long-term QQQ/QQQM investors, Morgan Stanley sees a lengthy runway of AI adoption across multiple industries and sectors. For example, AI could help firms realize new distribution and logistics efficiencies. That indicates the industrial sector could be a significant artificial intelligence adopter over time. The bank also sees AI being adopted at scale in the retail industry. That signals consumer discretionary and staples companies will lean on the technology.
Real estate — which could use AI for tasks such as credit review, cleaning of commercial space and other basic functions — is also primed to be a big AI adopter. The two consumer sectors — industrials and real estate —combine for over a quarter of the S&P 500’s weight. Byrd notes the industrial sector in particular is an “underappreciated structural beneficiary” of increase artificial intelligence deployment.
“Morgan Stanley projects AI-driven efficiency will contribute an incremental 30 basis points and 50 basis points to S&P 500 (SP500) net margins in 2026 and 2027,” according to Seeking Alpha.
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