From banks to beauty: Fund manager says AI is giving these companies ‘phenomenal’ uplift
Artificial intelligence has taken the world by storm, with Big Tech players Amazon , Nvidia , Meta and Microsoft among investors’ favorites to play the theme. Liontrust Asset Management’s Clare Pleydell-Bouverie is looking beyond the headline-makers, however, to other companies set to gain from AI adoption. She said AI is set to remove “a lot of waste out of people’s jobs,” and bring about a “phenomenal productivity uplift.” “It really means that people can be focused on what is going to drive and service business for these companies without having to … go into [the] administrative burden that takes up so much of our time,” the portfolio manager told CNBC’s Pro Talk on May 29. Pleydell-Bouverie co-manages Lionstrust’s global tech, innovation and dividend funds. For the year to March, all three funds beat their benchmark indexes, with the Liontrust Global Technology Fund rising 51.9%, compared to the MSCI World Information Technology Index’s 39.1%. A 90% efficiency gain’ Among the companies benefitting from AI is investment bank JPMorgan Chase , according to Pleydell-Bouverie, which can reportedly cut manual work by 90% with an AI-powered cash flow management tool. The bank is now developing a ChatGPT-like AI-powered software service called IndexGPT to select and tailor securities according to customers’ needs. JPMorgan shares are up around 15% year-to-date and almost 40% over the last 12 months. According to FactSet data, of 28 analysts covering the stock, 20 give it a buy or overweight rating. The average price target on the stock is $213.09, giving it around 9% potential upside. ‘Higher customer conversion’ Pleydell-Bouverie also said consumer-facing companies like French beauty and cosmetics label L’Oreal stand to gain from the adoption of AI. “They’ve pioneered beauty tech as an industry,” she said, adding that the company’s generative AI beauty assistant system has a 60% higher customer conversion than in-store advisors. Called Beauty Genius , L’Oreal’s AI-powered product is able to respond to questions, create personalized routines and recommend products based on users’ preferences. Shares in L’Oreal are listed on the Euronext Paris and are up around 0.2% year-to-date and 12% in the last 12 months. It is also available in the U.S. as an ADR . Of 26 analysts covering the stock, 11 give it a buy or overweight rating, 11 have a hold rating and four have a sell call. The analysts have an average price of $450.25 on L’Oreal, giving it slightly downside potential.
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