Artificial intelligence is not only benefiting technology companies. According to Nancy Tengler, chief executive officer and chief investment officer of Leffer Tengler Investments, many stocks in other industries stand to gain as well. While shares of megacap technology companies such as Nvidia and Meta Platforms have soared on hopes that AI will usher in new technological advances, higher productivity and profits, Tengler points to names outside of tech that are also benefiting from AI investments. Will benefit. “Our investment subject is old economy companies that are embracing the digital and creative AI axis,” Tengler, author of “The Women’s Guide to Successful Investing: Finding Financial Security and Achieving Your Goals,” said last week. said on CNBC’s “Money Movers.” ” The Money Manager highlighted industrial and consumer discretionary stocks that have embraced robotics and artificial intelligence to increase their productivity and profit margins. Tengler named several attractive value stocks that he calls the “picks and shovels” of AI. “, he says, including Emerson Electric, L3Harris Technologies, Visa, Walmart and McDonald’s. These companies are expected to continue to boast strong growth and stock performance, helped by AI. Tangler said. “Productive AI is much more compelling for a story than the Internet was in many ways,” Tengler said. But “there’s always a calculation. That’s why we want to ensure that even with older economy companies in our portfolio, all of our strategies materially outperform their benchmarks over the past year, and we expect that to continue. will continue,” said Tengler, who has led Arizona-based Laffer Tengler since 2018. Tengler pointed to Emerson Electric and L3Harris as industrial companies that are automating using digitization, and said they The firm recently added to its positions in both. In addition, Laffer is generally overweight on Tangler Industries. Shares of Emerson Electric, which makes fluid controls and industrial valves, among other products, have soared this year. has jumped more than 13 percent, nearly double the 7.4 percent gain in the S&P 500. Berenberg last Wednesday called Emerson the leader in the electrical appliances industry and raised his price target on the stock to $100. to $130, suggesting shares could rise 18 percent from Friday’s close. According to FactSet, the Street consensus is $120. The investment bank said earnings estimates for Emerson continue to rise, supported by the company’s December quarter results and higher revised guidance for fiscal 2024. The Melbourne, Florida-based company has used AI and machine learning for years, signing a five-year contract with the Department of Defense in 2022 to provide artificial intelligence services to both the defense and intelligence communities. JPMorgan analyst Seth Seifman recently upgraded L3Harris to overweight, writing in a January note that he sees “a relatively attractive valuation this year, cash flow that should be more impacted, and more on shareholder value.” “attention”, despite past execution issues. About two-thirds of all 10 analysts who cover L3Harris are buy, and their average price target of $244 suggests the stock will rise about 14% from Friday’s close. Walmart, another of Tangler’s top “old economy” AI plays, has gained 14.4% so far this year, double the rate of the broader market. Tengler highlighted Walmart’s recent three-for-one stock split and nearly 9% dividend increase as evidence of strong quarterly results and positive earnings momentum for the nation’s largest retailer. Walmart reported double-digit growth in its global e-commerce sales in the fourth quarter, driven by better efficiency and increased automation in distribution centers that fill store shelves and fulfillment centers for online customer orders. are “They have benefited not only from adopting robotics and digitization, but also from adopting creative AI in their e-commerce business and improving margins,” Tengler said of Walmart. “They’re more productive, they’ve taken away some of the really menial tasks with robotics, and they’ve had really strong consistent growth in their e-commerce business as well as their advertising business.” More traditionally, perhaps, the part of Tangler’s investment strategy that emphasizes companies offering “growth at a reasonable price” means it also owns more mainstream AI plays. such as Broadcom, Amazon and Microsoft.
