AI Winners: A Cheat Sheet

The immense importance of Generative Artificial Intelligence (GenAI) began to be understood in earnest in March 2023, when Nvidia (NVDA), which holds over 80% of the market for graphics processing units (GPUs), revealed a surge in global demand for its AI-powering chips.

With some AI leaders already reaping huge profits, several additional companies could be the next AI winners to deliver a fortune for their shareholders.

AI Companies to Watch

❖ Microsoft (MSFT): The greatest beneficiary among the giants could be Microsoft, the largest investor in OpenAI. MSFT also offers its own AI chatbots and tools, including the implementation of AI in its cloud platforms.

❖ Alphabet (GOOGL): Alphabet’s overflowing coffers permit it to continue the battle for the AI crown indefinitely, or at least until shareholders revolt.

❖ Super Micro Computer (SMCI): SMCI has invested in the development of high-end, energy-efficient servers. These enable the high-performance computing required to run AI, and its efforts are now paying off.

❖ Broadcom’s (AVGO): AVGO’s best-in-breed networking solutions facilitate in-sync work of AI hardware, placing it on a path to dominance.

❖ Oracle (ORCL): ORCL laid the groundwork for leadership over the last several years with its investments in cloud infrastructure. These are now entering a high-growth phase, as the demand for its Gen2 AI infrastructure substantially exceeds supply.

❖ Dell Technologies (DELL): DELL previously lagged behind its competitors for years. Now it has surprised on the upside, with strong demand for its servers with AI capabilities.

❖ HP (HPQ): The PC maker recently introduced the industry’s largest portfolio of laptops and mobile workstations leveraging the power of AI.

❖ IBM (IBM): Previously dismissed by investors as “a sleeping giant,” IBM is suddenly making waves with its AI-powered data platform, as well as its cost reduction through the replacement of some marketing and communications roles with GenAI.

❖ Taiwan Semiconductor (TSM): The world’s largest semiconductor foundry produces 90% of the chips used in AI training and applications, including those designed by Nvidia. TSM recently announced that the tech will be its main revenue driver this year.  

❖ Salesforce (CRM): The enterprise software leader has shown strong revenue growth led by its latest generative AI, multi-cloud, and e-commerce integration offerings.

❖ Autodesk (ADSK): ADSK develops software for architecture, engineering, and other professional uses. They recently posted stronger-than-expected earnings after adding some generative AI tools to its applications, and announcing work-in-progress on new AI-powered software.

❖ ServiceNow (NOW): The workflow software provider reported strong earnings growth last quarter, saying that its GenAI products immensely contributed to the value of new contracts.

❖ Workday (WDAY): This top developer of HR and other management tools swung from net loss to profit in the past year, and expects to double in size in the next several years thanks to its strategic initiatives on AI.

The Next Batch of Winners

❖ Apple (AAPL): Though Apple missed the AI-related rally this year, that may soon change. The iPhone maker is expected to announce GenAI integration into its iOS operating system, with the tool running directly on phones without relying on a connection to a server.

❖ Tesla (TSLA): Tesla has been working in several niches in the field of AI, including building AI chips to run its full self-driving software. It has also introduced a humanoid robot called Optimus Gen 2, which can perform various tasks and communicate using the GenAI technology.

❖ Adobe (ADBE): The publishing and media software champion entered the Gen AI field a year ago with Firefly, which generates images from a text prompt. In addition, Adobe has launched a beta version of an AI assistant for its Reader and Acrobat applications, which can summarize documents and answer questions about the text–a handy addition for anyone working with large documents.

The Investing Takeaway

AI is a long-term play. However, we are at a very early stage of the process, and it’s hard to know who the winners and losers will be. While every company out there seems to try to mention its “AI implementation,” significant monetization still belongs to the chosen few. Right now, the companies building the infrastructure of the future AI economy are the ones that are already capitalizing on the technology.

Further down the road, the cohort of AI winners will immensely – and mostly unforeseeably – expand (remember, when the Internet was as new as AI now, Amazon was a small online bookshop). For now, I suggest sticking with those already beginning to capitalize on the tech, while “checking the pulse” of the adjacent industries and players ready to take the baton.

For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.