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Coca-Cola uses AI to predict consumer behavior and create marketing content.
Georges Frey/Bloomberg
What is
Coca Cola
and the
London Stock Exchange
have in common? They could both be big winners in the race to adopt artificial intelligence.
Technology has led this year’s stock market rally – and in this sector, AI players have shone exceptionally as Wall Street struggles to account for the field’s profit potential.
It’s no surprise that much of the attention – and stock market gains – has gone to predictable Silicon Valley names such as those synonymous with software and the cloud.
Microsoft
(symbol: MSFT) and
Nvidia
(NVDA), for example, have easily outpaced the overall market this year.
Yet, according to a new report by
Citigroup
.
Coca-Cola (KO) and the London Stock Exchange (LDNXF) were among those highlighted by analysts, led by Amit Harchandani.
While it’s certainly too early to identify winners and losers, Harchandani notes, there are clear signs that some companies are “ahead of the curve” and others face “potentially significant risk” for their business models.
Fintech is a space that already uses AI, the Citigroup team points out. The London Stock Exchange uses it to organize and combine data sets. And US-based companies on board include Visa (V) and
MasterCard
(MA)—they use technology to monitor fraud and identity theft—and
Charles Schwab
(SCHW), where the focus is on improving customer service.
However, many others leverage AI well. The Coca-Cola beverage companies and
PepsiCo
(PEP) can better predict consumer behavior and create marketing content;
yum china
(YUMC) focused on better optimizing delivery routes.
walmart
(WMT), a Barrons stock pick, “is ahead of other competitors in the AI space,” given its adoption of the technology, analysts note. And they included General Motors (GM), which we think should be an AI stock.
That said, not all companies may find it easy to use AI to their benefit.
Harchandani and his colleagues note that some brokers and asset managers, such as
Raymond James Financial
(RJF), LPL Financials (LPLA) and
Financial Stifel
(SF) may find the traditional financial advisory model threatened by AI.
Ad agencies may see their revenue pressured by AI alternatives, a problem for companies such as IPG (IPG), while lowering barriers to entry are creating headaches for a number of companies. creative enterprises,
Adobe
(ADBE) to
Universal Music Group
(UMG) and
Warner Music
(WMG)—although Barrons argued that concerns about music labels are overblown.
Ultimately, AI is already making inroads into everyday life, from products on store shelves to purchases themselves. While the scope and threat of AI cannot yet be known, given how quickly the technology is changing, Citi’s claim that it is a “game changer” seems pretty clear. .
As Harchandani writes, “It is critically important for companies and investors to understand the potential limitations of generative AI and to use it with caution.”
Warning Emptor. At least until the robots tell us otherwise.
Write to Teresa Rivas at teresa.rivas@barrons.com