A small number of FTSE 100 shares could profit even though the US may have a monopoly on artificial intelligence (AI). Indeed, the British have little interest in creating generative AI tools or semiconductor chips. However, nearby companies are working out how to effectively use the innovative technology.
UK businesses are starting to realize the full potential of AI by incorporating advanced artificial intelligence (AI) technologies into their daily operations. Here are few that are worth thinking about.
Sage
Sage (LSE: SGE) is one of the top AI-driven growth firms in the UK. The British software company is well-known for its widely used payroll and accounting solutions. It began aggressively investigating AI’s potential a number of years ago, and it appears that those efforts are now bearing fruit. Copilot, its most recent creation, is a support tool that enables financial teams to quickly spot typical problems like budgeting errors.
After it released encouraging full-year 2024 results, the share price recently increased by 20%. Cloud-native revenue increased by 22%, while organic sales increased by 9.2%. Additionally, a £400 million repurchase scheme was established.
However, the price may now be overpriced due to the quick growth. It is at risk of short-term losses since it is over £13, which is 40 times earnings per share (EPS). New purchasers might have missed this month’s highest gains, but investors who purchased last month will be pleased.
Nevertheless, it appears to be in a strong position to benefit from AI in the long run.
Although the holiday season has taken a toll on me, I want to purchase the stock as soon as I have money again the following month.
Rolls-Royce
Rolls-Royce (LSE: RR.), which has increased 526% since January 1, 2023, has been one of the biggest winners over the last two years.
AI might not seem like a good fit for the aerospace engineer right away. But it has been actively looking for ways to use the technology to maximize operating efficiency. Notably, it is improving its maintenance monitoring systems by integrating AI sensors into jet engines. This increases airline efficiency, enhances safety, and lowers expensive unscheduled downtime.
Additionally, it has teamed up with Google to build an AI-powered system for autonomously guiding maritime ships.
Despite the company’s best efforts since COVID, liabilities still exceed assets on the balance sheet. Its performance may be limited by the expense of debt servicing. The aircraft industry’s cyclical nature, supply chain interruptions, and prospective interest rate increases all have an impact on this risk.
Nonetheless, it was able to lower its overall debt from £7.7 billion in 2022 to £5.7 billion as of right now. Gross profits increased from £2.75 billion to £3.62 billion over that time.
While you currently own shares in Rolls-Royce through a FTSE 100 fund, investors considering AI should give it some thought.
Alternative stocks for AI
Additional UK-based AI stocks to take into account are Softcat, an AI-focused IT company, and Kainos, which collaborates closely with US software behemoth Workday. A UK-listed firm called Polar Capital Technology Trust owns equity in some of the top AI companies in the US. Consider Alphabet (Google), Microsoft, Apple, Nvidia, and Meta.
AI is probably going to be used in 2025, regardless of how investors decide to divide their money. Every investment could eventually be an investment in artificial intelligence (AI), which is poised to transform everything from mining to medicine.
- Anaconda’s Meela Mitchell Makes History as Fifth Copperhead Girl to Reach 1,000 Points - December 20, 2024
- Disney Introduces ‘Bluey’ Characters to Parks and Cruises: Here’s What to Expect - December 20, 2024
- Top 5 Fitness Trends That Received India Over in 2024 - December 20, 2024