Microsoft and Alphabet take center stage in the artificial intelligence race, but they aren’t the only companies poised to benefit from the latest buzz on Wall Street, Morgan Stanley said. Analyst Erik Woodring outlined a slew of IT hardware stocks poised to prosper secondarily from the generative AI push slated to drive demand for more powerful and faster computing and data storage. “In the near-term, we don’t believe our universe stands to benefit in any material way,” he wrote in a note published Friday. “However, there are a variety of second derivative impacts that the proliferation of Generative AI could have on IT Hardware companies in the coming years.” Woodring highlighted Apple as a key AI beneficiary, citing the iPhone maker’s A-series and M-series chips along with its in-house silicon developments. He emphasized a component within its chips powering machine learning features such as Face ID as another example of its AI strides. “We believe these prior investments could position Apple uniquely as a hardware leader as AI interest increases and consumers run more AI- intensive applications on smartphones,” Woodring said. IBM is another beneficiary at the “forefront of AI” for decades, according to Woodring. While widely known for its Watson computer, IBM has harnessed its AI capabilities in recent years to assist companies with automating tasks and creating virtual assistants. IBM YTD mountain IBM shares so far this year Going forward, Woodring expects IBM to continue implementing AI into its software used for security and automation applications, instead of creating standalone products. “In addition, the need to move AI applications between cloud and on-premise environments to improve latency could boost the value proposition of RedHat OpenShift and containers,” he wrote. Along with Apple and IBM, Woodring highlighted Dell Technologies as a potential beneficiary long term if demand for AI-powered central processing units grows. — CNBC’s Michael Bloom contributed reporting
