Morgan Stanley says AI and gig work could add $400 billion to the economy by 2030. Here are the 4 buy-rated stocks that will benefit, and the brands that could be challenged.

• Morgan Stanley believes that income from the gig economy will be enhanced by generative AI.
• Companies that provide platforms to gig workers that integrate AI are expected to benefit.
• Gig workers using generative AI reported a 21% boost in income.

According to a Morgan Stanley note published on September 18, generative artificial intelligence may not threaten your job but may help you make more money.

This is especially true for those who engage in side hustles or gig work, which the investment bank believes will become increasingly popular as the gap between income and expenses widens.

The note identifies dwindling asset wealth prospects for younger generations as a key driver of a growing gig economy. For example, Gen Z homebuyers face a 10x multiple of salary, whereas Gen X homebuyers in 1986 faced a 4x at a comparable age. Working multiple jobs is also driven by an increased desire for flexible work hours in a slower-growing economy.

According to a survey conducted by the investment bank, younger or college-educated respondents believed that generative AI could help close some of these gaps. It also revealed that participants were already using AI tools for things like homework and earning money. Almost 30% of Gen Z respondents thought AI increased job security. Only 5% of respondents were concerned that technology would make them feel less secure in their roles.

According to the survey, AI tools are also increasing the profitability of gig work. Those who adopted the technology reported a 21% increase in income compared to their peers who did not.

According to Morgan Stanley’s estimates, the gig economy combined with AI is slated to add $400 billion in income globally by 2030.

It’s a growing trend that the investment bank considers to be a new secular growth theme.

Apps and platforms that facilitate e-commerce, freelancer marketplaces, shared rides, food-delivery apps, and even investing platforms are expected to benefit from this growing trend. However, that is only if they have jumped on the bandwagon and integrated generative AI capabilities into their platforms or are in the process of doing so.

Gig-work platforms can integrate AI tools and improve the user experience by assisting with the creation and customization of business listings. For example, on rent-to-earn platforms where hosts offer short-term rental properties, it can customize a page and respond to user complaints and comments. Product listings in e-commerce can be enhanced with higher-quality images and product descriptions.

Morgan Stanley analysts rate four stocks as “overweight,” which means they believe these stocks will outperform their peers.

Adobe is at the top of the list. According to equity analyst Keith Weiss, the software company’s integration of generative AI add-ons and features provided through its Firefly product is expected to generate $1.99 billion in additional revenue by 2025. The stock’s price target is $660.

Amazon (AMZN) is laying the groundwork for developers and businesses to build generative AI applications with its Bedrock platform, which is accessible via its web services cloud. Thousands of businesses, including IBM, the investment firm Bridgewater, Booking.com, and Phillips, have already used the product. According to equity analyst Brian Nowak, the company has also launched Agents, a service that can respond to requests and complete tasks. The stock has a price target of $175.

Alibaba (BABA) touts its competitive advantage in providing AI capabilities across four layers: computing power, model, data, and applications. According to equity analyst Gary Yu, the company has launched a marketing tool that will allow users to improve their storefront decorations and generate items such as pictures, slogans, and listings. The stock’s price target is $150.

Meituan, a Chinese food-delivery app, is also ahead of the AI game after purchasing Light Year. This AI startup company will provide access to talent who can help develop the technology. However, Yu raised concerns about the deal’s structure. The stock’s price target is set at HK180.

Other beneficiaries mentioned by Morgan Stanley (while not being overvalued) include Uber, GoDaddy, Udemy, and Roblox.

Companies that could be impacted by this trend include Yelp, Robinhood, and Lyft.

The table below is an expanded version that shows which brands Morgan Stanley believes will benefit or be challenged by the intersection of gig work and generative AI.