Our Global Head of Fixed Income & Public Policy Research
Michael Zezas discusses how Morgan Stanley’s key themes –
deglobalization, longevity, the future of energy, and artificial
intelligence – will evolve in 2025 and beyond.
----- Transcript -----
Welcome to Thoughts on the Market. I’m Michael Zezas, Morgan
Stanley’s Global Head of Fixed Income and Public Policy Research.
Today I’ll discuss the key investment megatrends Morgan Stanley
Research will be following closely in 2025.
It’s Wednesday, January 15th, at 10am in New York.
Short-term trends can offer investors valuable insights into
immediate market dynamics. But it’s the long-term trends that
truly shape the investment landscape. That’s why each year,
Morgan Stanley Research identifies a short list of megatrends
that we believe will provide long-term investment opportunities
in an ever-changing world.
Three of Morgan Stanley’s megatrends—artificial intelligence,
longevity, and the future of energy—carry over from last year. A
fourth—the rewiring of the global economy—returns to our list
after a hiatus in 2024. While none of these megatrends is new,
each has evolved in terms of how it applies to investment
strategies.
Let’s start with the rewiring of global commerce for a Multipolar
World. As I mentioned, this theme rejoins our list of key
megatrends after a year-long break. Why? In short, it’s clear
that policymakers globally are poised to implement policies that
will speed up the breakdown of the post-Cold War globalization
trend. Simply put, policymakers are keen to promote their visions
of national and economic security through less open commerce and
more local control of supply chains and key technologies.
Multinationals and sovereigns may have to accelerate their
adaptation to this reality. Some will face tougher choices than
others, while there are some who may still benefit from
facilitating this transition. Knowing who fits into which
category—and how this new reality may play out—will be critical
for investors.
Our next theme—Longevity—remains an essential long-term secular
trend, and this year the focus will be on measurable impacts for
governments, economies, and corporates. The ripple effects of an
aging population, the drive for healthy longevity, and
challenging demographics across many geographies continue to
impact markets. And in 2025, we see investors focusing on several
specific longevity debates: First, innovation across healthcare –
especially in an AI world, with obesity medications remaining
front and center. Second, impacts on consumer behavior –
including the drive for affordable nutrition. Third, the
need to reskill aging workforces – especially if retirement ages
move higher. And, finally, there’s implications for financial
planning and retirement – with a bull market for financial advice
just starting.
Our next theme centers around energy. When we think about
the future of energy, our focus for 2025 shifts from
decarbonization to the wide range of factors driving the supply,
demand, and delivery of energy across geographies. And the common
thread here is the potential for rapid evolution. We’ll be
tracking four key dynamics: First, an increasing focus on energy
security. Second, the massive growth in energy demand driven by
trillions of dollars of AI infrastructure spend, to be met both
by fossil fuel-powered plants and renewables. Third, innovative
energy technologies such as carbon capture, energy storage,
nuclear power, and power grid optimization. And fourth, increased
electrification across many industries. We continue to believe
that carbon emissions will likely exceed the targets in various
nations’ climate pledges. So, we expect focus to shift toward
climate adaptation and resilience technologies and business
models.
Our last key theme is artificial intelligence and tech diffusion.
Although it’s been two years since the launch of ChatGPT, we’re
still in the early innings of AI's diffusion across sectors and
geographies. However, while 2024 was driven by AI enablers and
infrastructure companies, in 2025 we expect the market to focus
on early AI downstream use cases that drive efficiency and market
share. As you heard yesterday, our Global Head of Thematic
Research Ed Stanley, explained that there’s alpha in
understanding this rate of change. Agentic AI will be center
stage, with robust enterprise adoption, stock outperformance for
early adopters, positive surprises in model capabilities, greater
breadth of monetization, and thus less attention to
return-on-investment debates.
Before I close, it’s worth mentioning that you will likely see
connections between these complex themes. As an example, the
complexity of a multipolar world makes energy security all the
more vital. The demand for energy connects with the enormous
power requirements of AI. And AI is set to drive healthcare
innovations which could help us lead longer healthier lives. We
see these four themes not as static categories but as an
interconnected roadmap for investing over the long-term – and
we’ll be sharing more on specific debates throughout the
year.
Thanks for listening. If you enjoy the show, please leave us a
review wherever you listen and share Thoughts on the Market with
a friend or colleague today.
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