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Counterpoint Global: Investing in Second-Order Effects of AI

Artificial intelligence (AI) and automation are rapidly transforming the business landscape, with profound implications for companies, workers, and investors. In their April 2025 report, Morgan Stanley’s Counterpoint Global explores how the adoption of these technologies is driving efficiency, reshaping workforces, and creating new investment opportunities-especially through “second-order effects.”

Their research leverages proprietary tools and multidisciplinary analysis to identify which companies are best positioned to benefit from these shifts and examines the broader societal and economic consequences.

Here are the key takeaways:

  • Second-Order Effects Drive Enduring Value

Counterpoint highlights that, historically, the most substantial investment returns have come not from the obvious, first-order beneficiaries of new technologies (like chip manufacturers for AI), but from companies that capitalize on the broader changes these technologies enable. For example, while automobile manufacturers faced fierce competition, big-box retailers like Walmart-enabled by suburbanization-generated far greater long-term returns.

  • AI and Automation Will Significantly Reshape Workforces

Counterpoint’s analysis estimates that if the 1,000 largest public companies automated away half of the roles with a high probability of automation, it could result in 1.7 million fewer jobs and $207 billion in reduced labor expenses. For the top 25% of companies, this could drive profit growth of 16%, expanding the profit pool from $311 billion to $361 billion.

  • Culture and Human Capital Management Are Critical

Counterpoint emphasizes that company culture and human capital management – often overlooked by markets – can unlock human ingenuity and align employee empowerment with value creation

  • Investment Strategies Should Focus on Efficiency Gains and Stakeholder Alignment

The report suggests that the best investment opportunities will be in companies that not only adopt AI and automation but also manage the resulting tensions among stakeholders (customers, shareholders, suppliers, and employees) effectively.

We anticipate the adoption of AI and automation technologies will reshape workforces.

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Disclaimer of liability

The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

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