UK stocks aren’t famed for their exposure to artificial intelligence (AI). That’s not to say we can’t find stocks that benefit from AI on the London bourse. Investors recently ploughed into minnow RC365, sending the stock soaring after its AI credentials were published online.
AI has continued to make significant progress in 2023, signalled by the growth of the Nvidia share price, along with many of its peers. It is clear that AI is becoming increasingly capable of solving complex problems, and it is likely to continue to play an ever more important role in our lives in the years to come.
However, US AI stocks like Nvidia are currently trading at significant premiums relative to index averages. So, let’s take a look at some UK stocks that could see AI-derived growth in the coming years.
Experian
Experian, a credit reporting agency, utilises AI to analyse data and offer valuable insights into consumer creditworthiness. Its AI-powered solutions are widely employed by banks, lenders, and other financial institutions to facilitate informed lending decisions.
Recently, the credit-checking firm demonstrated its confidence in meeting full-year expectations. The firm recorded a surge in first-quarter revenues, even amid a decelerating lending market.
During the three months leading up to June, the company achieved 5% organic revenue growth at the group level. North American revenue rose by 4% and the UK and Ireland experienced a 1% uptick.
Ocado
Ocado Group, a major, high-end British online grocery retailer, leverages AI to automate its warehouse operations. AI-powered robots efficiently pick and pack orders, enabling Ocado to deliver groceries to customers’ doorsteps with enhanced speed and effectiveness.
The stock has experienced an impressive 89% surge over the past three months (with a 12% increase over the last 12 months) after achieving a core profit in its first half. Furthermore, Ocado expects its retail earnings to be “marginally positive” for the full year.
However, despite these positive developments, the current macroeconomic environment poses challenges in enticing grocery chains to adopt Ocado’s fulfilment systems. This could reflect a challenge for short-term revenue growth.
Rightmove
Rightmove is a property website that uses AI to match buyers and sellers. Through AI-driven algorithms, the company analyses property listings and buyer preferences, offering personalised recommendations to potential buyers.
Recently, Rightmove backed its full-year expectations, supported by a significant increase in first-half profit and the largest revenue surge in five years. This was all achieved despite a challenging backdrop.
Rightmove remains relatively resilient as it is not directly affected by fluctuations in house prices, despite the UK’s housing market not being particularly robust. The company’s revenue model primarily relies on monthly subscription fees paid by customers to advertise their properties on the site, along with other advertising income.
