Top FTSE 100 shares poised to benefit from artificial intelligence in 2025

While US investors are tripping over themselves to grab the latest AI stocks, our writer looks for opportunities closer to home in the FTSE 100.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The US might have a monopoly on artificial intelligence (AI) but there are still a few FTSE 100 shares that could benefit. Sure, the British aren’t big on building semiconductor chips or developing generative AI tools. Yet local businesses are finding ways to harness the groundbreaking tech in powerful ways.

By integrating advanced AI solutions into their day-to-day operations, UK companies are beginning to discover the true potential it has to offer. So here are a few worth considering.

Sage

One of the leading AI-driven growth companies in the UK is Sage (LSE: SGE).  Many people will know the British software company for its popular accounting and payroll solutions. Several years ago it enthusiastically started exploring AI’s capabilities and now those efforts look to be paying off. Its most recent development, Copilot, is an assistance tool that helps finance teams rapidly identify common issues like budgeting errors.

Should you invest £1,000 in Rolls-Royce right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rolls-Royce made the list?

See the 6 stocks

Created with Highcharts 11.4.3Sage Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The share price jumped 20% recently after it posted promising full-year 2024 results. Organic sales were up 9.2% with a 22% increase in cloud-native revenue. It also announced a £400m buyback programme.

But the rapid growth means the price could now be overvalued. At over £13, it’s 40 times earnings per share (EPS), which puts it at risk of short-term losses. Investors that bought last month will be happy but new buyers may have missed the best returns this month.

Still, I think it looks well-positioned to reap the benefits of AI in the long term.

The festive season has squeezed me dry but I plan to buy the stock as soon as I have cash again next month.

Rolls-Royce

One of the biggest winners of the past two years has been Rolls-Royce (LSE: RR.), up 526% since 1 January 2023. 

The aerospace engineer may not immediately seem like a company to benefit from AI. However, it’s been aggressively finding ways to optimise operational efficiency with the technology. Notably, it’s using AI sensors embedded in jet engines to enhance its maintenance monitoring systems. This reduces costly unscheduled downtime, improves safety and boosts airline efficiency. 

It’s also partnered with Google for the development of a system to guide maritime ships autonomously using AI.

Created with Highcharts 11.4.3Rolls-Royce Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

The company’s been working hard to improve its balance sheet since Covid but liabilities still outweigh assets. The cost of servicing debt could restrict its performance. This risk is further impacted by the cyclical nature of the aerospace industry, supply chain disruptions and potential interest rate hikes.

However, it’s managed to reduce its total debt from £7.7bn in 2022 to £5.7bn today. In the same period, gross profit’s grown from £2.75bn to £3.62bn.

I already have exposure to Rolls-Royce via a FTSE 100 fund but for investors looking at AI, it’s worth considering.

Alternative AI stocks

Other UK-based AI stocks to consider include Kainos, which works closely with US software giant Workday, and Softcat, an IT company with an AI focus. Polar Capital Technology Trust‘s a UK-listed fund that holds shares in some of the leading US AI stocks. Think Nvidia, Microsoft, Meta, Apple and Alphabet (Google). 

However investors choose to allocate their funds in 2025, AI’s likely to feature somewhere. Set to revolutionise everything from mining to medicine, there may come a time when every investment is an investment in AI.

Should you buy Rolls-Royce now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Mark Hartley has positions in Kainos Group Plc. The Motley Fool UK has recommended Alphabet, Apple, Kainos Group Plc, Meta Platforms, Microsoft, Nvidia, Rolls-Royce Plc, Sage Group Plc, and Softcat Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Want a comfortable retirement? Here’s how much you need in your SIPP

The SIPP is a great vehicle for confident investors to build their personal pension over time and eventually use that…

Read more »

Investing For Beginners

3 ways I try to spot cheap shares during a stock market crash

Jon Smith talks through his process of filtering for cheap shares at a time when simply buying anything isn't the…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

As share trading hits new records, here’s why I’m planning to keep buying UK shares!

Thinking like Warren Buffett and buying 'on the dip' can unlock significant long-term returns from UK shares. Here's why.

Read more »

Elevated view over city of London skyline
Investing Articles

UK stocks: a brilliant buying opportunity?

UK stocks have taken a battering in recent days. That can be disconcerting -- but our writer is taking a…

Read more »

Bronze bull and bear figurines
Dividend Shares

2 dividend shares that could provide some shelter from the market storm

Jon Smith points out a couple of dividend shares that have yields in excess of 5% -- and that have…

Read more »

Investing Articles

I’ve been snapping up shares in this 11.6% yielding FTSE 250 growth stock

As a trade war knocks a quarter of the value off this FTSE 250 asset manager in a few days,…

Read more »

Investing Articles

I asked ChatGPT which FTSE 100 stocks are screaming buys for Trump’s tariff war. Here’s what it said

As the trade war heats up and the sell-off in stocks resumes, Paul Summers is looking for great FTSE 100…

Read more »

Investing For Beginners

Analysts now expect up to 4 UK rate cuts this year! Here’s what it could mean for the FTSE 100 index

Jon Smith points to the rapidly shifting market expectations when it comes to UK interest rates and explains the impact…

Read more »