The bullish stance on artificial intelligence (AI) investments comes as NvidiaNASDAQ:NVDA) and Microsoft (Nasdaq:MSFT), and SoundHound AI (Nasdaq:SOUN). Increasingly, investors and analysts are looking at a broader picture. They suggest that the next big gains could come from companies that adopt AI to transform their business operations. At the heart of this shift is the potential to dramatically improve productivity and efficiency across a range of industries – a natural next step in the AI ​​revolution.
A shift in investment focus
J.P. Morgan (NYSE:JPMJohn McClellan, an AI analyst at a German private bank, said it’s important to shift investment focus beyond semiconductor manufacturers and cloud computing providers. He said it’s unwise to continue targeting only “the semiconductor manufacturers and cloud computing providers that are driving the creation of new AI models,” and instead suggested investors should also look at companies that are adopting AI to transform their business operations.
Increased productivity and efficiency
AI is not just a spectacular technological advancement. Its primary function is to generate productivity gains and efficiency improvements. Claire Pleydell Bouverie, Portfolio Manager at Liontrust Asset Management,GB: RioThe paper stressed that AI will “take a lot of the waste out of people’s jobs” and result in “tremendous productivity gains.” This efficiency gain is evident at companies like JPMorgan Chase, which reportedly saw an AI-powered cash flow management tool reduce manual work by 90%.
JP Morgan’s AI Initiative
JP Morgan, America’s largest bank, is also developing IndexGPT, an AI-powered software service similar to ChatGPT that customizes securities to meet client needs. The bank’s shares have risen about 15% year-to-date and almost 40% in the past 12 months. The bank has a Strong Buy rating on TipRanks, with 18 of the 23 analysts covering the stock giving it a Buy rating. The average price target of $213.96 suggests room for upside of about 11.7%.
Consumer Enterprises and AI Adoption
Consumer companies are also expected to benefit greatly from the adoption of AI.OTC:LRLCYFrench beauty and cosmetics giant L’Oreal has pioneered beauty tech with its AI-generated beauty assistant system, “Beauty Genius.” The AI-powered product can answer questions, create personalized routines, and recommend products based on user preferences. What’s more, L’Oreal’s AI system has a 60% higher customer conversion rate than in-store advisors.
Key Takeaways
The next wave of AI beneficiaries are likely to be companies across sectors that are adopting AI to transform their business operations. These companies are poised to reap the benefits of significant productivity gains, improved efficiency, and enhanced customer engagement.
