Artificial intelligence could add a staggering $16 trillion to the S&P 500’s market value, according to a new Morgan Stanley note flagged by Business Insider. That’s a potential 29% jump in the benchmark index.

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The big winners? Large-cap firms, which Morgan Stanley estimates could see $920 billion in net benefits from leaner headcounts, lower costs, and fresh revenue streams. Industries likely to benefit the most include consumer staples distribution, retail, real estate, and transportation. With the power of AI, Morgan Stanely estimates their pre-tax income earned in 2026 could double over the long term.

The bank points to two main AI drivers: agentic AI — autonomous systems capable of decision-making — worth about $490 billion of the benefits to large-cap firms, and humanoid robots, estimated to add $430 billion.

“We’re at an inflection point,” the analysts wrote, predicting that AI capabilities will keep improving “rapidly.” They caution, though, that their rosy estimates depend on widespread adoption, which will unfold unevenly across companies and industries. If progress accelerates non-linearly, Morgan Stanley says the gains could exceed even these lofty projections.

For American workers, the picture is more complicated. Some will need to reskill or pivot careers, while new roles like AI supply chain analyst and AI ethicist could emerge. “If history is any guide, AI could result in net job creation, though there could still be periods of displacement,” Morgan Stanley's note to clients over the weekend said.

Other Wall Street voices have been more skeptical. Goldman Sachs predicted in 2023 that AI could automate 300 million jobs worldwide, while Anthropic CEO Dario Amodei recently warned that up to half of entry-level white-collar roles could vanish within five years.