Compass Investments

– Catenaa Wednesday, February 25, 2026 – Excessive price declines in various industries triggered by fears of artificial intelligence-related disruptions are creating favorable conditions for market participants, analysts at Morgan Stanley believe.

Investors should look to so-called “AI beneficiaries”-resilient manufacturers and companies with high asset quality-to capitalize on price declines and growth fueled by the technology. According to strategists including Andrew Pauker, the investment appeal of firms that are actively integrating AI and have significant value growth potential continues to strengthen.

The short-term favorable factors associated with the proliferation of AI are helping to offset longer-term concerns about shocks to affected areas and the market as a whole, Pauker said.

Although the software sector has been among the hardest hit by investor panic, strategists say the market appears to be assuming that existing players will not be able to take full advantage of AI innovations.

On the contrary, they say AI is expanding the enterprise software market, and Morgan Stanley analysts see “attractive entry points” for companies such as Microsoft, Intuit and Atlassian.

The banking sector will be a clear beneficiary of AI, as the technology will lead to productivity and revenue growth over time, Morgan Stanley predicts.

They singled out Citigroup, Bank of America, State Street and Truist Financial as the “most reliable” picks, according to the bank’s analysts.

Among other sectors, strategists also see stocks of consumer credit firms as net beneficiaries of AI, as short-term shocks to their operations are ultimately outweighed by increased efficiency.

In insurance, AI should gradually improve brokerage operations, but complex contract work, regulation and compliance issues are unlikely to change dramatically in the foreseeable future, they said.

In payments and fintech, strategists see Mastercard and Visa as the clear beneficiaries of AI and the agent-based commerce model.