Generative artificial intelligence is likely to commoditize content while live experiences, especially sports, are set to capture attention and generate the most value, Morgan Stanley said in a note emailed Friday.

The firm sees Formula One (FWONK), TKO Group (TKO), Live Nation Entertainment (LYV), Walt Disney (DIS) and Sphere Entertainment (SPHR) as particularly resilient, "anti-fragile" entertainment assets in an AI-driven world.

In a more fragmented and distracted world, "nothing captures viewer attention more than sports and live events, which carry urgency, unpredictability, and a sense of communal participation that reflect and shape the culture," the firm said, adding that these events' scarcity gives them stronger monetization and pricing power.

The firm said Live Nation and Sphere Entertainment are the clearest examples of this trend. Disney's Parks and Resorts use well-known global intellectual property to create in-person experiences with strong pricing power. Formula One and TKO Group provide exposure to highly strategic trophy assets, with strong cash flows and attractive entry points, according to the note.

Morgan Stanley adjusted price targets on Liberty Formula One from $120 to $117, Sphere Entertainment from $135 to $158, and TKO Group from $215 to $225, while TKO was also upgraded from equalweight to overweight. Paramount Skydance (PSKY) was upgraded from underweight to overweight and its price target was raised from $11 to $14.

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