Morgan Stanley's 2026 Outlook: AI Divide, Energy Reshaping to Drive Global Economy

Morgan Stanley forecasts that AI technology divergence and energy infrastructure restructuring will dominate the global economy through 2026. In a report led by global thematic research head Stephen C. Byrd, the firm identifies these shifts among four core themes that will determine market performance. The report predicts a bifurcated "two worlds" AI landscape by mid-2026, with U.S. frontier models pulling ahead. Surging compute demand will outpace supply, reshaping data center economics. Geopolitically, policy is expected to focus on critical mineral supply and domestic manufacturing. AI giants may adopt "off-grid" power strategies to secure low-cost electricity as energy costs rise. The firm's thematic stock portfolio outperformed the MSCI World Index by 16 percentage points in 2025.