Bank of America has dubbed global companies exposed to the demand for generative artificial intelligence solutions as “winners,” picking stocks across the software and IT services sectors. It described the AI opportunity within the software industry as “undeniably vast” in a research note dated 12 July, and ranked European companies in the sector. Top of its ranking is French software company Dassault Systemes , which BofA likes for its acquisition of healthcare data platform Medidata in 2019, meaning it has drug trial information from more than 7 million patients. “This huge amount of data is a treasure trove for multiple AI use cases, with generative therapeutics design one of the most exciting use cases,” the analysts led by Frederic Boulan, stated. German software firm SAP is also highly ranked, with the bank choosing the stock for its enterprise resource planning software — known as ERP — which helps companies automate HR processes and other functions. “Huge quantities of data about a company’s operations are held within a company’s ERP system which makes the software vital in any generative AI integration,” BofA’s analysts stated. “We see gen AI as an opportunity for the Software industry to derive both potential revenue uplift via enhanced value proposition and data monetization, alongside productivity improvements,” the bank said. BofA also looked at the effect of generative AI on the IT services industry and said implications “are the most polarised,” noting concerns over drops in sales due to tasks being automated. “However, we view IT Services companies as enablers of the GenAI shift for their customers, given access to a vast talent pool, with opportunities around bespoke application development, data analytics, cloud migration and cybersecurity,” the analysts stated. The bank said IT consultancies Capgemini , Kainos and Tietoevry are “well placed” to benefit from the demand for AI-related services. BofA said global revenues from AI are expected to grow at a compound annual growth rate of 19%, reaching $900 billion by 2026, citing data from the International Data Corporation. — CNBC’s Michael Bloom contributed to this report.
