Investors have always scrambled to profit from emerging trends through the stock market, but in recent years, the search for the next home-run investment has become increasingly mainstream. From the boom of the cannabis industry to the rise of meme stocks, retail investors have repeatedly flocked into risky investments based on hype, routinely pushing valuations to unsustainable levels. But not all trends are made equal. Morgan Stanley’s Global Thematic Research team says investors’ new favorite in the early days of 2023, artificial intelligence (AI), has “real market impact potential.”
“In recent years we’ve witnessed a number of investing fads: From meme stocks to cannabis to Web 3. As each narrative has cooled, theses have drifted and fleet-footed capital has pivoted back to safety...or on to the next,” they wrote in a Thursday research note. “Yet, something suggests the AI hype is worth considering seriously...product market fit.”
