Ford, Boeing, and Other Surprising Stocks That Could Be the Next AI Winners

Goldman Sachs added Ford to its list of stocks that could get a boost from AI. (Brandon Bell/Getty Images)

Move over, Nvidia and Broadcom. Step aside, Microsoft, Amazon, and Alphabet .

Investors need to start looking for companies that will benefit from the mass adoption of artificial intelligence technology and large language models that power OpenAI/ChatGPT. Goldman Sachs believes there is a much bigger list of winners than the AI-chip arms dealers and cloud hyperscalers.

Many of the names might surprise you. Think of big industrial firms like Ford Motor and Boeing , as well as chemicals company Dow. Several notable consumer firms, such as Sharpie and Rubbermaid maker Newell Brands, deep discount retailers Dollar General and Dollar Tree, and streaming provider Roku are also new additions to Goldman’s basket of companies that could get an AI productivity boost.

Real estate firms Rocket Companies and Zillow, government contractor Booz Allen Hamilton, and utility Idacorp, a recent Barron’s stock pick, were also added to the list of other potential longer-term beneficiaries from AI.

Those stocks join other high-profile names in Goldman’s basket of AI winners, such as Pinterest, New York Times Co., H&R Block, CarMax, and Accenture.

“The US economy remains in the early innings of AI adoption,” the Goldman strategists wrote in a report Thursday. They cited a survey from the Census Bureau that showed only 9% of U.S. companies used AI to produce goods and services in the second quarter.

Still, large publicly traded companies are talking more about how their bottom lines can benefit from AI. The Goldman strategists said that during the second-quarter earnings season, 58% of S&P 500 companies mentioned AI on their conference calls.

Most of the discussions centered around productivity and efficiency, the use of AI in call centers and other customer support functions, and AI services related to coding and engineering, as well as marketing.

Investors will need to be patient. The Goldman strategists conceded that the current crop of AI beneficiaries—Big Tech companies and a select group of utilities and data centers that are getting a boost from increased power needs to run AI—will remain on top for the foreseeable future.

But investors should start to look for the next wave of AI winners now. The AI trade will broaden out at some point to include consumer, industrial, and other companies that should be able to use AI to reduce costs and lift profit margins.

“Increased AI adoption will eventually accompany an increase in productivity-driven earnings upside,” the Goldman strategists wrote, adding that “investors will require evidence of a meaningful near-term impact on earnings.”

It still isn’t clear what AI will do to the labor market over the long haul. A potential offset to higher corporate profits could be an AI-induced spike in unemployment, particularly for the types of jobs that could be replaced by technology.

The Goldman strategists said they aren’t seeing pervasive evidence of an AI-induced hit to jobs just yet, noting that “only a handful of companies explicitly linked use of AI and reduced headcount” in second-quarter earnings calls. But the rise of AI will likely have a long-term impact on the broader economy as well as investors’ portfolios.

Write to Paul R. La Monica at paul.lamonica@barrons.com