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AI'S "LOW HANGING FRUIT" IS IN EUROPE

Europe may be late to the artificial intelligence-enabler party. But when it comes to adoption, Morgan Stanley says it's a different story, with the region quietly catching up - and fast.

In a deep dive that unpacks 20 top European stock ideas, the U.S. bank finds that 69% of MSCI Europe now shows moderate to significant AI adoption exposure, outpacing the U.S., at 45%.

"European AI adopter ROI is emerging, levels of adoption are high and broadening, and scope for efficiency improvements substantial," a team of MS strategists and analysts write.

"What makes AI adoption particularly interesting in Europe is the extent of low hanging fruit given the starting point of relative productivity," they also say.

They point to strong earnings momentum among AI adopters with at least neutral pricing power, noting that these are not only outperforming their sectors but also their U.S. peers.

Yet, they still trade at a 28% forward PE discount.

Want some names?

Here below is the full list, which includes names in sectors ranging from financials to healthcare, consumer goods, industrials and technology.

KBC KBC.BR, Experian EXPN.L, Bureau Veritas BVI.PA, RELX REL.L, Wolters Kluwer WKL.AS, SAP SAPG.DE, Sage SGE.L, Rexel RXL.PA, Schneider Electric SCHN.PA, Prosus PRX.AS, and LSEG LSEG.L.

And then also L'Oreal OR.PA, Qiagen QIA.DE, Scout24 G24n.DE, Siemens Healthineers SHLG.DE, Philips PHG.AS, Sonova SOON.S, EssilorLuxottica ESLX.PA, Deutsche Telekom DTEGn.DE and Allianz ALVG.DE.

(Danilo Masoni)

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