It's easy to identify companies that are leaders in artificial intelligence (AI). Just look at how their stocks have performed so far this year. Nearly every AI stock has soared 30% or more (and in some cases, a lot more).
All of those companies are in the technology sector or have large technology businesses. But other businesses stand to benefit significantly from AI, as well. I predict that the following three stocks will be among the biggest non-tech AI winners.
1. Bank of America
Global consulting firm McKinsey & Company recently released a report that identified banks as key beneficiaries of generative AI. The firm projected that generative AI could add between $200 billion and $340 billion in value to the banking industry.
I agree that AI could help banks in lots of ways. And the best bank stock to buy to profit from a potential AI boost is Bank of America (BAC 2.79%).
NYSE: BAC
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It certainly helps that Bank of America is a bargain right now. Shares of the big bank trade at a forward price-to-earnings ratio of only 8x. This discounted valuation is primarily due to the banking crisis. However, BofA's business remains exceptionally strong.
Few banks match Bank of America when it comes to technological innovation. The company won the American Financial Technology Award in 2022 for "Best AI/Machine Learning Initiative." I fully expect that BofA will leverage AI to the hilt, with the results ultimately showing up in increased profits and a rising share price.
2. UnitedHealth Group
Healthcare presents one of the most exciting opportunities for deploying AI. The technology could be used in drug development, diagnosing conditions, streamlining administrative tasks, and more.
Ideally, AI will, over time, help to reduce healthcare costs. That should be music to the ears of UnitedHealth Group (UNH +2.77%).
NYSE: UNH
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The company ranks as the biggest health insurer in the world. Its OptumRx is one of the top pharmacy benefits managers (PBMs).
Optum Health provides healthcare directly. Optum Insight helps healthcare organizations operate more efficiently. AI should help UnitedHealth Group in all of these businesses.
Even without an AI tailwind, UnitedHealth Group should deliver solid gains over the long term. The growing population of seniors in the U.S. should drive increased demand for healthcare services. Few companies stand to benefit from this trend as much as UnitedHealth Group.
3. Walmart
McKinsey projects that generative AI could add as much as $390 billion in value to the retail industry. It anticipates widespread benefits from the technology, including improved customer support and more effective supplier negotiations.
My hunch is that no retailer will reap the rewards from AI as much as Walmart (WMT +0.37%). The company reigns as the 800-pound gorilla of retail with its more than 10,500 stores across the world.
NASDAQ: WMT
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It's easy to overlook Walmart's e-commerce opportunity, too. Although Amazon is clearly the biggest e-commerce retailer in the U.S., Walmart comes in second place. The company's U.S. e-commerce revenue soared 27% year over year in the first quarter of 2023.
Walmart has already invested heavily in AI. The technology is integrated into the company's supply chain management, and many of its distribution centers use fully autonomous vehicles. The company uses AI extensively in managing its supply chain and in vendor negotiations. Walmart's distribution centers even use autonomous vehicles.
Like Bank of America and UnitedHealth Group, Walmart isn't a tech stock. But also, like both of these other companies, it's in a great position to win from what could be the biggest game-changing technology thus far.
