Artificial intelligence (AI) has been on everyone's lips ever since ChatGPT opened to the public a year ago.
But on the stock market, it can be confusing to work out which shares might benefit, other than the tech companies that generate AI.
Fortunately for The Motley Fool readers, one expert has stuck his neck out to nominate three ASX sectors where investors could position themselves for a windfall.
Let's take a look:
Image source: Getty Images
Long-term thematic that your portfolio could need
After a heady 12 months, deVere Group chief Nigel Green reckons AI could have a massive impact very soon in several sectors.
"AI stands at the forefront of technological innovation, poised to catalyse a profound transformation across industries," he said.
"The potential for a significant boost in productivity is particularly evident in sectors such as financials, airlines, and healthcare."
Of course, any increase in productivity in efficiency means that those businesses could pump up their earnings, thereby giving the share price an upward catalyst.
The AI theme is ideal for long-term ASX investors.
"AI's transformative impact is not a fleeting trend — it represents a long-term paradigm shift," Green said.
"By strategically positioning portfolios to capture opportunities in companies at the forefront of AI adoption, investors can align themselves with the transformative forces shaping the future of these industries."
AI to manage your money
Finance jobs, driven by data, are low hanging fruit for AI.
"The financial industry is experiencing a paradigm shift with the integration of AI technologies.
"Machine learning algorithms, natural language processing, and predictive analytics are revolutionising processes, from risk management to customer service."
Artificial intelligence can come up with data analysis that might take humans much longer, or not at all.
"Investors should consider seizing potential opportunities in this sector by looking at investments in fintech companies and financial institutions embracing AI to gain a competitive edge."
Of course, high-frequency trading is an activity that computers could perform infinitely better than flesh-and-blood traders.
"AI-powered algorithms can analyse vast datasets and execute trades with speed and precision, providing a potential boost to investment returns – as such, investors could consider exposure to funds or companies specialising in algorithmic trading strategies."
Green points out fraud detection and risk management are also areas that AI could enhance decision-making.
"AI enhances risk assessment by analysing complex patterns and identifying potential threats, investors may find opportunities in companies developing innovative risk management solutions for financial institutions."
Flying and health: data-rich industries
Maybe if you are a nervous flyer you might not want to think about this. But the aviation industry could be transformed by machines taking over.
It's not just piloting, according to Green, who named predictive maintenance, fuel efficiency and enhancing customer service as examples of activities that could be vastly improved with AI.
"Savvy investors are likely to explore opportunities in airlines adopting AI for route optimisation," he said.
"And companies investing in AI-driven customer service solutions may present attractive investment opportunities."
AI algorithms can trawl through historical flight data and weather patterns like no human could to find the best route for any given flight, saving fuel and operational costs. Chatbots could cut long queues for customer service.
In healthcare, Green reckons "AI is becoming a transformational force".
"Companies developing AI-powered diagnostic tools and technologies may present investment opportunities in the healthcare sector, and investors may consider pharma companies leveraging AI for drug development."
The bonus for investors backing stocks of ASX businesses that are adopting AI is that it shows the leadership is "forward thinking".
"Companies embracing AI technologies gain a competitive edge by improving efficiency, reducing costs, and enhancing decision-making processes," said Green.
"Investors positioning their portfolios in such companies could benefit from their ability to outperform industry peers."
