February 2, 2026 05:00 AM GMT Thematic Alpha | North America US Consumer Pulse Survey: AI Use in the Spotlight This report provides a full breakdown of data from our 72nd survey of ~2,000 consumers in the U.S., which ran January 22nd - January 26th, to gauge consumer behavior, attitudes and outlook. | M US Consumer Pulse Survey: AI Use in the Spotlight | Michelle.M.Weaver@morganstanley.com Katie.Solovieva@morganstanley.com Anna Feldman Equity Strategist | Foundation +1 212 296-5254 +1 212 761-6753 | | --- | ...

Core Insights - Companies are investing heavily in data platforms, analytics, and artificial intelligence, aiming for better insights, faster decisions, and measurable growth, yet many AI programs underperform and productivity gains stall [1] - The technology itself is not the primary issue; rather, it is the existing systems and organizational structures that hinder effective implementation [1][2] Group 1: Operating Models and AI - Many organizations still operate under outdated models that centralize authority and slow down decision-making, which undermines the potential benefits of AI [3][4] - AI requires clarity in decision-making, ownership, and trust in data; without these, performance can deteriorate rapidly [3] Group 2: Execution Challenges - The operating model dictates how work is done, who makes decisions, and how success is measured, yet these models often change the least despite evolving strategies and technologies [4] - AI tools can provide real-time insights, but ambiguous decision authority and risk-averse incentives can hinder effective execution [5][6] Group 3: Breakdown of Execution - Execution failures are not due to a lack of ambition or investment but stem from operating models that do not support the necessary behaviors for sustained performance [7] - A common issue is the reliance on centralized approvals, which creates delays as insights outpace leaders' ability to process them [8]

Core Insights - Amazon.com is developing an e-commerce fulfillment business that leverages artificial intelligence and robotics to enhance efficiency while reducing the reliance on human labor [1] Group 1 - The integration of artificial intelligence and robots is central to Amazon's strategy in optimizing its fulfillment operations [1] - The company's focus is on creating a more efficient system that minimizes the necessity for human workers in the fulfillment process [1]

Core Viewpoint - The new products are designed to assist importers in evaluating and adhering to the rapidly evolving U.S. trade policies [1] Group 1 - The products aim to provide tools for compliance with U.S. trade regulations [1]

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Market Overview - AI infrastructure investment is rapidly growing year-over-year, with significant commitments and announcements in data centers [2][3] - AI-exposed companies have driven the majority of stock market increases over the last three years, accounting for nearly all incremental capital expenditure growth in the S&P 500 [3] Nvidia and OpenAI Deal - Nvidia's deal with OpenAI involves substantial chip purchases and a large investment, raising questions about the long-term implications for Nvidia [4][5] - Nvidia has made over 50 investments in AI-native companies in 2024, with the OpenAI deal being the largest at $100 billion, continuing its long-term investment strategy in AI [6][8] AI Infrastructure and Software Companies - Companies with infrastructure exposure, such as Nvidia and data center contractors, are expected to perform well in the AI boom [10] - Software businesses that integrate AI functionality into existing products, like ServiceNow, are seen as having significant growth potential, despite being currently underperforming [11][13] Blackstone and Alternative Investments - Blackstone is positioned well in the current market environment, benefiting from tight credit spreads and a strong IPO market, with expectations of significant earnings growth [16][18] Amazon's Growth Prospects - Amazon's recent settlement of a $2.5 billion FTC lawsuit removes a legal overhang, allowing focus on growth in both retail and AWS [19][20] - Amazon's retail business continues to outpace competitors, with opportunities for cost savings through robotics and expanded grocery delivery capabilities [22] Retail Sector Insights - Walmart and Costco are both well-positioned in the retail market, with Costco showing strong comparable sales growth but carrying a high valuation [24]

Core Insights - CrowdStrike is increasingly entrenched in endpoint security and expanding in cloud protection and next-generation SIEM, leading to strong recurring revenue growth projections into fiscal year 2027 and beyond [1] Analyst Upgrade - Scotiabank analyst Patrick Colville upgraded CrowdStrike from Sector Perform to Sector Outperform and raised the price forecast from $440 to $600, citing the company's scale and profitability as a rare asset in the software sector [2] Market Positioning - CrowdStrike has become more deeply entrenched in endpoint security, aiming to capture a significant portion of the over 50% market share not controlled by the top three vendors [3] Customer Demand - Large enterprises are increasingly looking to consolidate their cybersecurity stacks, with CrowdStrike's 31-module platform delivered through a single agent and console being an attractive solution [4] Customer Retention - Following the 2024 Falcon outage, CrowdStrike effectively retained customers and offered aggressive discounts to ensure long-term adoption, with discounted modules providing quick value and low interest in switching at renewal [5] Future Revenue Growth - As contracts roll into fiscal 2027 and 2028, these commitments are expected to significantly boost annual recurring revenue (ARR), with management guiding for over 20% new ARR growth, potentially reaching an upside case of 25-30% [6] Revenue Disclosure - The disclosure on contra revenue is expected to trim reported growth by less than 1%, which is viewed as removing a key overhang [7]

Core Insights - Job boards remain a significant platform for hiring, with 69% of employers conducting most of their hiring through them and 32% expecting increased reliance in the next year [2][3] - Candidates also favor job boards, with nearly 80% using general job boards and 54% utilizing industry-specific ones [2] Employer Preferences - Employers desire job boards to evolve by offering features such as messaging, prescreening questions, skills assessments, interview scheduling, job ad writing, and applicant tracking system integrations [3] - Other popular recruiting methods include employee referrals (71%), company websites (50%), and professional networking sites like LinkedIn (46%) [4] Candidate Behavior - Job seekers utilize professional networking sites (55%), company websites (45%), search engines (42%), and networking (33%) in their job search [5] - Candidates suggest that employers improve communication by providing hiring timelines, salary ranges, contact information, benefits details, and insights into company culture [5] Communication Challenges - Better employer branding and storytelling can enhance candidate engagement, addressing issues like ghosting and fake job postings, which are significant frustrations for candidates [6] - Communication between candidates and employers is a major concern, with 59% of candidates and 51% of employers citing ghosting as a frustration [6] Impact of AI - AI tools are expected to play a larger role in recruitment, potentially improving communication but necessitating transparency regarding AI usage [7] Application Process Issues - Online recruiting systems need to simplify complex application processes, as nearly 60% of candidates have abandoned applications due to frustration [8] - Candidates report that confusing applications and poor communication are their primary job search challenges [8]

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Core Insights - GitHub CEO Thomas Dohmke emphasizes that developers must embrace AI or risk becoming obsolete, based on a recent study on AI tool usage among developers [1][2] - The role of developers is evolving from mere code writers to AI managers, with a significant shift in their daily tasks and responsibilities [2][5] Developer Role Transformation - Developers are transitioning through four stages of AI adoption: AI Skeptics, AI Explorers, AI Collaborators, and AI Strategists [2][3] - The new core responsibilities include delegation to AI and verification of AI-generated outputs [2][3] Future of AI in Development - Half of the surveyed developers believe that the era of AI generating 90% of code will arrive within two years, while the other half estimates five years [3] - Developers are optimistic about their roles being redefined rather than diminished by AI, focusing on capability enhancement rather than just time savings [3][4] Essential Skills for Developers - Seven core competencies are identified for developers in the AI era: AI literacy, agent collaboration, human-AI synergy, foundational programming skills, verification and quality control, product understanding, and architectural design [4][6] Industry Outlook - The U.S. Bureau of Labor Statistics projects an 18% growth in software development jobs over the next decade, significantly outpacing the average growth rate across industries [4][5] - Companies are expected to hire more developers who can leverage AI to enhance productivity, with a focus on those who adapt to AI transformations [5][6] Community Reactions - Some developers express skepticism about the study's conclusions, arguing that a small sample size cannot represent the entire industry [6] - Conversely, many developers agree with Dohmke's perspective, viewing AI as a tool to significantly enhance their productivity and capabilities [6][7]