While artificial intelligence is transforming industries and creating uncertainty in the stock market, some companies are better shielded from its disruptive effects than others. Morningstar analysts have identified five stocks that they believe are well-positioned to thrive, even as AI continues to advance. These companies possess strong competitive advantages, solid fundamentals, and operate in sectors less vulnerable to AI-driven disruption.
One such company is S&P Global (SPGI), which has been underperforming in the market due to concerns about AI disruption in capital markets information services. However, Morningstar believes these concerns are overdone, citing the company's "wide moat" stemming from its data-driven benchmarks in credit ratings, financial indexes, and commodity price reporting. The embedded nature of these benchmarks provides S&P Global with a strong competitive position and solid operating margins.
Other companies mentioned by Morningstar include Centrus Energy (LEU), Lennar (LEN), Lear (LEA) and Voyager Technologies (VOYG). These companies are all customers of Palantir, which chooses to work with companies with complex operations, because there's potentially more room to help those companies generate efficiencies with the right data and information.
These five stocks represent companies with business models that are less susceptible to being upended by AI. By focusing on companies with established market positions, strong competitive advantages, and diversified revenue streams, investors can potentially mitigate the risks associated with AI disruption and position their portfolios for long-term growth.
