Artificial Intelligence (AI) has been a hot topic in the stock market, with leading AI chipmaker Nvidia soaring by nearly 155% this year. While semiconductor stocks and technology giants like Amazon have reaped the benefits of the AI trend, RBC Capital Markets is highlighting some alternative ways to play the theme.
RBC Capital Markets views AI as the “next disruptive mega-trend” that has the potential to reshape the entire ecosystem. The firm believes that GenAI will significantly change the ways businesses, communities, and people interact with one another and with machines. This transformative impact is likened to the influence of technologies like PC, Internet, mobile phones, cloud computing, and social media in our lives today.
Meta Platforms, the parent company of Facebook, is one of the stocks identified by RBC Capital Markets as a beneficiary of the AI trend. With new AI features and tools being rolled out, Meta Platforms has seen a 52% increase in its share price this year. The firm expects digital advertisers to market towards AI and virtual assistants, enhancing the growth prospects for companies like Meta Platforms.
Software stocks like CrowdStrike and Adobe are poised to capitalize on the proliferation of AI. CrowdStrike, a provider specializing in security solutions, stands to benefit from increased security needs driven by data protection concerns. Adobe leverages AI for creativity and innovation through its Firefly suite, which generates images and enhances digital advertising campaigns. These companies are expected to experience significant growth opportunities as AI continues to evolve.
The IT services sector is another area that is set to prosper from the AI trend. While the demand for projects is expected to increase, there is also a potential threat of automation leading to job displacement. Accenture, a leading IT company, is seen as an early winner in the AI wave, with AI bookings exceeding $2 billion in fiscal 2024. The firm believes that Accenture’s expertise in cloud migration and data organization positions it well to capitalize on AI-related solutions.
In addition to the aforementioned stocks, other potential winners in the AI space include liquid cooling leader and power management company Eaton, e-commerce platform Shopify, information services companies Thomson Reuters and Moody’s. These companies are expected to benefit from the growth of AI and the opportunities it presents in various industries.
As AI continues to gain prominence in the market, investors have a myriad of opportunities beyond semiconductor stocks and tech behemoths to capitalize on this transformative trend. With the potential to disrupt industries and reshape business landscapes, AI is paving the way for a new era of innovation and growth. Investors looking to ride the wave of AI should consider the diverse range of companies highlighted by RBC Capital Markets as key players in the evolving AI landscape.