AI Boom Drives Thematic Investment

AI  emerged as a key catalyst and transformative force behind Morgan Stanley’s 2025 mega-investment themes: tech diffusion, the future of energy, investing in a multipolar world, and longevity. 

Investors seeking exposure to these secular themes are finding they have to manage overlapping risks and opportunities, while preparing for the next- level impacts of the AI boom on different industries and the global economy.  

“As the year draws to a close, one thing we can highlight is that AI threads through everything. It’s a generalized technology,” said Ellen Zentner, Morgan Stanley Chief Economic Strategist and Global Head of Thematic and Macro Investing. 

Zentner spoke at the firm’s inaugural Thematic Conference on Dec. 9, which convened strategists, thought leaders and investment professionals from across Morgan Stanley at its New York headquarters. 

Long-Term View Tops Market Volatility 

From announcements of hefty tariffs and trade agreements to geopolitical tensions and inflation debates, 2025 delivered plenty of market-moving headlines. Yet, thematic investors remain focused on structural trends rather than short-term shocks. 

“What we’re really focused on is identifying forces that will create positive or disruptive surprises over the long term,” said Lisa Shalett, Chair of the Global Investment Committee and Chief Investment Officer of Morgan Stanley Wealth Management. “That’s where wealth is created.” 

Thematic strategies often rely on custom baskets of securities that target the intersections of disruptive change across supply chains, labor markets, and society. 

“In thematic investing, we’re not trying to make an outsized call on specific names. Instead, we try to find the catalyst and ultimately think about the internal correlation of those stocks,” said John Storey, U.S. Head of Thematic Investment Strategies at Morgan Stanley Institutional Equities. “You want to stay in these trades throughout economic cycles, so the ability to not have to try and time every trade is crucial.”  

Looking Ahead to 2026 

Katy Huberty, Morgan Stanley’s Global Director of Research, said that her team is already mapping the next wave of themes. 

“We tell investors each January about the three, four or five themes that are going to generate the most alpha,” Huberty said at the conference. “It's a commitment to our clients that we will dominate those themes.” 

In addition to the 2025 themes, another frequent topic of discussion at the Thematics Conference was digital assets and the evolution of cryptocurrencies. The financial industry and investors are increasingly developing strategies to operate in that space, especially after the approval of the Genius Act, a set of regulations for the use of stablecoins, in the U.S. 

“Participants cannot turn back the clock or resist tokenization of the global financial system,” Shalett said. “Tokenization is going to permit 24/7 trading of almost all assets with much more liquidity and transparency. It’s going to be profoundly transformative.” 

For Stephen Byrd, Head of Thematic and Sustainability Research at Morgan Stanley, the evolution of AI and reshoring of supply chains should continue to be a focus in 2026. 

How AI Spans Mega Themes 

Tech Diffusion 

The AI investment cycle—expected to involve roughly $10 trillion in corporate spending—is still in its early stages. But companies are already starting to see productivity gains from their investments, with clear impacts on the overall economy.  

In its 2026 economic outlook, Morgan Stanley forecasts that productivity gains from AI will account for about 20% of global growth next year.  

“Technology is accelerating at such a rate that the sustainable growth of the economy becomes structurally higher,” Shalett said.  

In the next phase of the AI cycle, returns on investments are likely to become more tangible as industries move from AI deployment to AI application. That means companies adopting AI for real-life use cases—from autonomous driving to drug discovery—could deliver outsized returns. 

“When you look at any decade-long tech cycle, the money is first made in semiconductors, then it shifts to infrastructure, but typically the most alpha is generated in the application layer—where all the companies are adopting within their use cases and productivity gains start to apply,” Huberty said.  

Stan DeLaney, who leads disruptive change research at Morgan Stanley Investment Management’s Counterpoint Global, explained why the world is still in the very early stages of adopting AI.  

Future of Energy

One of the main challenges to AI diffusion is access to power: Data centers and their advanced chips require unprecedented amounts of energy. That represents an opportunity for power companies that can innovate to supply sustainable sources of power.   

“A typical CPU chip in a rack that's about the size of a student chair would consume enough power for 10 to 12 homes,” said the CEO of a power company that develops solutions to convert fuels like natural gas, biogas and hydrogen into electricity without combustion. “Nobody even thought about the amount of additional power that will be needed. It’s a beast.”  

Multipolar World 

Global supply chains are evolving not only based on geopolitical tensions or alliances, but also because of technological innovation. 

The race to dominate AI technology—especially between the U.S. and China—is likely to have far-reaching consequences for military, diplomatic, and economic influence. One example is the attempt to control the global trade of rare earths—the minerals that are critical for the tech industry.   

"We are in the unusual situation where there’s one thing basically powering the global economy at this point, and 90% of it is made on a small island off the coast of China," said former U.S. National Security Advisor Jake Sullivan. "How AI evolves over the course of the next three years is going to have massive impacts on the U.S. economy and global economy, but also frankly, on the future of geopolitics."  

Longevity 

As a thematic investment strategy, the fact that people are living longer is driving structural changes across healthcare, finance, consumer goods and housing. 

“Longevity is no longer a health story — it’s a macro story,” Zentner said. “The aging population will drive 40% of consumption growth, reshape housing and labor markets, and unleash a $120 trillion wealth transfer.”  

AI has become a critical influence on longevity as it’s helping in drug development, making healthcare more efficient and allowing people to stay socially and economically engaged.  

“AI will keep us active and productive for longer,” Zentner said.