Artificial intelligence (AI) is disrupting a number of different services and industries. Some ASX shares are finding opportunities to boost the profit margin by using AI.
Companies that are able to grow the revenue and profit margin can grow their bottom line at a pleasingly fast rate, which can be a good thing for shareholder returns.
Businesses don't necessarily need to be classified as an ASX tech share to use AI. I'm going to tell you about three ASX shares that are looking to utilise AI to boost profit.
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Temple & Webster Group Ltd (ASX: TPW)
Temple & Webster is an ASX retail share that sells all of its 200,000 products online. It has a large array of furniture and homewares on its website, as well as a growing home improvement range and products for home improvement.
The company recently gave a business update which included an AI update.
It said that ChatGPT now powers all pre-sale product enquiry live chats (which accounts for 25% of customer enquiries. This led to an "increase in live chat customer satisfaction, an increase in customers adding products to their carts, and an increase in conversion rates from this channel."
The ASX share has increased its investment in Renovai, an Israeli start-up that is disrupting how customers shop. At the moment, this powers product recommendation mood boards on the site which have shown a "significant increase in conversion rate for customers who interact with this tool."
Finally, it has used AI to generate "enhanced product descriptions across all 200,000 products on the site, a task not possible to do at scale efficiently with a human team." Company testing has shown this has led to an increase in the conversion rate, add to carts and revenue per visit.
Sonic Healthcare Ltd (ASX: SHL)
Sonic is a global pathology business, but it's involved in AI in a couple of different ways.
The ASX healthcare share has a 20% stake in AI business Harrison.ai which has an existing joint venture called Annalise.ai, which is seen as a market leader in radiology AI.
Sonic's joint venture with Harrison.ai is called Franklin.ai which aims to "develop best-in-class AI diagnostic tools for pathology. Sonic will use Franklin products in-house to "enhance efficiency and quality in its global operations."
Franklin's strategy is to sell AI solutions to the global market. The ASX share's management believes there are "powerful synergies between Sonic (medical) and Franklin (AI) teams."
Volpara Health Technologies Ltd (ASX: VHT)
Volpara is an ASX healthcare share that provides software for medical professionals to carry out breast screening and analysis to help them analyse a patient's risk and help inform them on the next steps.
The company says that its "focus on customer value" means that its "AI-powered image analysis enables radiologists to quantify breast tissue with precision and helps technologists produce mammograms with optimal image quality."
Volpara says that it has a "substantial growth outlook" which includes leveraging AI to create new models for image analysis and interpretation, as well as new applications of research data.
The ASX share has also revealed that Volpara's AI team is working with Microsoft on software to identify heart disease.
