Winners and Losers in Artificial Intelligence: Citigroup Analyst Report

So far, especially the well-known Silicon Valley companies have made spectacular price gains through AI, writes Barron’s. For example, Microsoft and Nvidia are 39% and 196% higher this year respectively.

The stock market has already taken advantage of the profit potential of artificial intelligence among tech giants, driving valuations up sharply.

Chances

Still, there are plenty of opportunities for investors in companies that deploy AI operationally, according to an analyst report from Citigroup. Coca-Cola and the London Stock Exchange, for example, come out well in that area.

Amit Harchandani, leader of the Citigroup analyst team, comments: “It is still too early to pick definitive winners and losers, but it is clear that some companies are already ahead of the curve, and others are taking a risk by not jumping right in. in AI developments.”

Forerunners

Fintech is a sector that is at the forefront of AI applications. That’s how the London Stock Exchange it to sort and combine datasets. Large established parties such as Visa in Mastercard monitor fraud and identity theft using AI; financial service provider Charles Schwab for example, also uses artificial intelligence to improve customer service.

Profit growth is also possible with artificial intelligence in more “traditional” sectors. So can Coca Cola in PepsiCo better predict consumer behavior and create marketing content. Yum China uses AI to optimize delivery routes, leading to major cost savings.

In the retail industry Walmart in the auto industry General Motors ahead of the competition in embracing artificial intelligence, according to Citigroup analysts.

Losers

However, not every company is eagerly anticipating the arrival of artificial intelligence. Harchandani’s team concluded that some brokers and capital managers such as Raymond James Financial, LPL Financials in Stifel Financial see their financial advisory model threatened by AI.

Creative companies such as Adobe, Universal Music Group (UMG) en Warner Music Group (WMG) are seeing barriers to entry lower – though Barron’s believes concerns about AI for the music labels are exaggerated.

AI is starting to appear more and more in everyday life and has become known to the general public through ChatGPT. At the moment it is not yet completely clear how AI will turn out for companies, but there is no doubt that it is a ‘game changer’, according to the Citigroup team.

In conclusion, Harchandani writes, “It is incredibly important for companies and investors to understand the potential limitations of generative AI and proceed with caution. ”

2023-07-28 06:30:00
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