In this article, we discuss the 35 non-tech AI opportunities amid DeepSeek selloff.
Investors are searching for safer ways to capitalize on the AI boom beyond traditional tech stocks. Towards the back end of last year, Goldman Sachs highlighted sectors such as utilities, industrials, retail, and healthcare as key beneficiaries of AI-driven productivity gains and cost reductions. While companies like NVIDIA have surged in value due to their role in AI hardware, Goldman analysts suggest the market has yet to fully recognize the potential of downstream AI-exposed industries. David Kostin, Goldman’s chief US equity strategist, outlines four phases of the AI boom. The first phase revolves around NVIDIA and AI chipmakers, while the second phase focuses on AI infrastructure, including semiconductor, data center, networking, cloud, and security firms. These stocks have significantly outperformed market benchmarks in 2024.
The third phase will involve companies integrating AI into their products to drive revenue growth. While these firms have lagged behind pure AI plays, their time is expected to come. The fourth phase includes businesses that will realize long-term productivity gains from AI adoption. Currently overlooked by the market, these companies are expected to see valuation expansions over time. The industrial sector exemplifies this trend. Since early 2023, industrial stocks have gained nearly 30%, with AI-exposed firms more than doubling in value. In Q4 2023, AI mentions in industrial earnings reports rose from 10% to over 30%. Goldman Sachs anticipates these trends will continue, with downstream AI stocks eventually rallying as their AI-driven efficiencies translate into earnings growth.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
As the sudden popularity of Chinese AI startup DeepSeek ignites a tech selloff in the US stock market, investors are closely monitoring the non-tech AI opportunities that hold explosive growth potential. Earlier this month, Goldman Sachs released an investor note detailing some of the non-tech beneficiaries of the AI boom. Per the bank, the rise of AI-driven data centers was fueling a massive increase in electricity demand, with power needs expected to grow by over 160% by 2030. Nuclear energy is poised to play a critical role in meeting this demand, but it won’t be the sole solution. Natural gas, renewables, and battery storage will also be essential, according to Goldman Sachs Research.
The report notes that big tech companies have already signed contracts for over 10 GW of potential new nuclear capacity in the US, with three nuclear plants possibly coming online by 2030. Globally, governments are becoming more supportive of nuclear power, with the COP28 summit setting a goal to triple global nuclear capacity by 2050. However, challenges such as labor shortages, permitting difficulties, and uranium supply constraints may slow progress, the report warned. Renewables will also be a major part of the energy mix, with 40% of new capacity expected to come from wind and solar. However, their intermittent nature means they must be paired with battery storage and baseload sources like nuclear or natural gas. Despite lower energy costs for renewables, transmission and storage limitations pose challenges.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
For this article, we selected non-tech AI stocks by consulting an investor note from prominent investment firm Goldman Sachs. These stocks are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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35 Non-Tech AI Opportunities Amid DeepSeek Selloff
35. Clarivate Plc (NYSE:CLVT)
Number of Hedge Fund Holders: 18
Clarivate Plc (NYSE:CLVT) operates as an information services provider in the Americas, the Middle East, Africa, Europe, and the Asia Pacific. A combination of factors makes this company a promising investment. The most noteworthy among them is the company’s modest increase in subscription revenues, as illustrated in the report for the third quarter of 2024. For instance, revenues increased $3 million, or 0.7%, to $411.1 million. Organic subscription revenues increased 0.6%, driven by price increases. Moreover, the British Library has selected the company to provide its library services and discovery platforms to create a more cohesive, streamlined and secure experience. The British Library will implement Alma, Primo VE and Rapido, which would help the company restore and improve access to the collection, enhance its support for research and make the knowledge and resources the company holds accessible to everyone.
