AI Unleashed: Watchlist

Exploring which companies stand to win big from AI

Let’s talk about AI today. I hope it’s not too late, right? Since the release of GPT-3 by OpenAI in late 2022, the buzz hasn’t stopped, and that's because the pace of continuous developments in the space is impressive. The quality of foundational models is improving rapidly.

But for us, stock-picking nerds, the key question is: which companies will benefit from these AI developments? For now, it’s clear that during a gold rush, the winners are those making the picks and shovels. Take NVIDIA, for example (+465% since 2023), along with other chipmakers. And honestly, we still think that their growth isn’t over yet.

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But let’s look at the other side of the pond—companies that are adopting AI in their businesses and are poised to win, grow, or significantly benefit from it. The use cases range from automation to data analytics. This space is just warming up and could use some attention. Take, for instance, the recent case of Klarna (not public yet), which introduced an AI support assistant powered by OpenAI. The first month's results are sound—AI managed the equivalent workload of 700 full-time agents, handling 2.3 million conversations, which accounts for two-thirds of Klarna’s customer service chats. And they expect it to drive a $40 million USD profit improvement in 2024. Impressive, isn’t it?

• The AI assistant has had 2.3 million conversations, two-thirds of Klarna’s customer service chats

• It is doing the equivalent work of 700 full-time agents

• It is on par with human agents in regard to customer satisfaction score

• It is more accurate in errand resolution, leading to a 25% drop in repeat inquiries

• Customers now resolve their errands in less than 2 mins compared to 11 mins previously

• It’s available in 23 markets, 24/7 and communicates in more than 35 languages

• It’s estimated to drive a $40 million USD in profit improvement to Klarna in 2024

Source: Klarna’s website

Below, we’ve compiled a list of companies we believe will be beneficiaries of AI adoption and should be on your investing radar as the AI market continues to expand and evolve.

AI Watchlist: Hardware

AI Watchlist: Software

Link to the file.

In our next newsletters, we will dive deeper into all these companies. If some of them particularly interest you, please let us know. We’ll start with those.

Happy investing!