Key Points:
- Nancy Tengler of Laffer Tengler Investments says not only technology companies like Nvidia and Meta Platforms are benefiting from artificial intelligence (AI), but companies in sectors like industrial and consumer discretionary are also improving their productivity and profit margins.
- Dengler identifies companies like Emerson Electric, L3Harris Technologies, Visa, Walmart and McDonald's as prime examples of „old economy” companies that are using AI to improve their growth and stock market performance.
- An investment strategy focused on the adoption of AI by traditional companies outperformed Laffer Tengler Investments' portfolios compared to its benchmark indices, highlighting the significant potential of AI beyond the technology sector.
In an environment where artificial intelligence (AI) is generally considered a driver for technology companies, Nancy Tengler, CEO and Chief Investment Officer of Laffer Tengler Investments, highlights how a wide range of industries will greatly benefit from this revolution. According to Dengler, tech giants such as Nvidia and MetaPlatforms are leading the way, but companies in other sectors are also adopting AI to improve their productivity and profit margins.
Focus on the „old economy”.
During an appearance on CNBC's „Money Movers,” Dengler, author of „The Women's Guide to Successful Investing,” emphasized the importance of investing in „old economy” companies that are reinventing themselves through digitalization and AI. This strategy has resulted in outperformance of their portfolios compared to their benchmark indices.
Leading industrial and consumer discretionary sectors
Companies highlighted by Dengler include Emerson Electric, L3Harris Technologies, Visa, Walmart and McDonald's, all of which have integrated AI into their operations for growth and stock performance. Described as the “tools and shovels” of AI, these companies demonstrate potential beyond the realm of technology.
Market Performance and Forecasts
Dengler highlighted the strong performance of industrial companies Emerson Electric and L3Harris Technologies that have embraced digitization and automation. He also noted Laufer Dengler's favorable position in the industry. So far this year, Emerson Electric has seen growth of more than 13%, while L3 Harris has advanced nearly 2%, thanks to its collaboration with the defense industry in providing AI services.
Walmart and the Electronic Commerce Revolution
Walmart stands out among Dengler's picks, up 14.4% this year, demonstrating strong quarterly results and positive earnings momentum. Increased efficiency and automation in its distribution centers, along with growth in its global e-commerce sales, underscore how AI adoption can translate into tangible success for „old economy” companies.
A diversified investment strategy
In addition to focusing on companies outside the technology sector, Dengler also bets on traditional AI companies such as Broadcom, Amazon and Microsoft, following an investment philosophy that seeks „growth at a reasonable price.” This balanced approach allows Laffer Tengler Investments to successfully navigate today's dynamic market by leveraging both emerging AI opportunities and established securities.
In short, Dengler's perspective on investing in AI demonstrates that the potential of this technology transcends the conventional boundaries of the technology sector and offers significant growth opportunities in a variety of industries. The strategic adoption of AI by companies across various sectors is not only redefining what it means to be a company in the “old economy” but also establishing a new paradigm for business success in the digital age.
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