AI and ChatGPT is the new 'iPhone 2007' moment for tech - Morgan Stanley

The recent acceleration in AI applications is more evolutionary than revolutionary, a team of Morgan Stanley analysts led by Brian Nowak wrote in a note titled “How is AI Set to Change the Tech Landscape…and What’s NEXT?” today.

“We see accelerating AI-driven tech innovation leading to changes in consumer behavior and new enterprise revenue and productivity enablers across the entire economy,” the analysts said.

Morgan Stanley also linked the recent surge in AI interest, mostly fueled by the ChatGPT launch in November 2022, to Apple’s (NASDAQ: AAPL) iPhone moment in 2007, which “expanded the mobile landscape and use cases for consumers and businesses.”

Morgan Stanley’s deep-dive analysis sees leading tech platforms - Google (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), and Apple - as best-positioned to benefit from the ongoing AI frenzy.

This group of tech companies is leading the race “given the high capital/compute intensity of building/maintaining increasingly complex AI models and growing importance of scaled, unique data sets.”

However, the costs associated with AI are also very high. Morgan Stanley expects to see “an increase in energy and bandwidth costs as AI workload penetration grows.”

In the meantime, AI-linked stocks continue to surge. C3.ai (NYSE: AI), gained 33.65% on Friday after the company’s management said on last week’s earnings call that it is witnessing a “dramatic change” in business sentiment compared with mid-2022.

By Senad Karaahmetovic

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