Nvidia has become synonymous with the rapid rise of artificial intelligence, with early investors enjoying meteoric share price growth alongside bumper profits.
The California-based chip company is spearheading the AI revolution, with its chips having found themselves being used by almost every major tech company worldwide.
As the world's third largest company, with a market cap of $3trillion, Nvidia has been at the forefront of the growing development of artificial intelligence alongside the six other members of the 'Magnificent Seven': Microsoft, Amazon, Alphabet, Tesla, Meta and Apple.
While Nvidia has seen its shares surge more than 600 per cent since January 2023, and almost 3,000 per cent over the past five years, the Mag Seven as a whole has grown 49 per cent in the past year, and almost 80 per cent over the past five.
Boasting a combined market cap of more than £14.42trillion, these seven stocks alone dwarf the UK's FTSE 100, which has a total market cap of just £2trillion.
Unsurprisingly, these firms dominate the AI conversation and are the ones making the biggest strides.
However, behind the headlines covering these big hitters, countless smaller companies are using the benefits that AI offers, whether by streamlining their processes or integrating the tools into their business models.
This is Money talks to professional investors about their favourite London-listed stocks embracing the AI revolution.
Ken Wotton, fund manager of WS Gresham House UK Smaller Companies Fund, said: 'Despite ongoing pessimism, we are convinced numerous British companies – especially within the agile small and mid-sized space – can coexist and eventually thrive as the utilisation of AI accelerates.
'Investors will play a crucial role in this phase, guiding corporate boards to deeply understand AI's capabilities and integrate this innovation to gain competitive advantages and boost productivity.'
With the gen AI market expected to reach $1.3trillion in revenue by 2032, according to Bloomberg, companies risk being left behind if they fail to embrace the technology.
Capitalising on the data
Maritime software company Windward tracks more than 2million vessels every day to optimise customer supply chains and manage transport risks.
It has implemented AI into business areas such as regulation, logistics, decarbonisation, law enforcement and navigation safety.
The AIM-listed firm recently launched its Maritime AI Expert, which has been built on Amazon's Bedrock foundation and has been trained on 12 years of maritime data.
The firm says its AI capability reduces vessel screening and investigation times by 20 minutes on average, and is also able to provide action recommendations on the outcome.
'Its gradual expansion reflects Windward's strategic approach to growth, balancing swift technological adoption with careful, long-term planning,' Wotton said.
'Unlike companies that rush to adopt new technologies at all costs - which can often lead to more significant risks - Windward's methodical strategy has allowed it to integrate new technologies thoughtfully and effectively.'
Meanwhile, tool and equipment hire firm Speedy Hire has looked to AI to streamline operations, making time and cost savings by doing so.
Speedy's use of AI allows it to predict where it can drive the most sales by distributing its kit to areas with the highest demand, as well as reducing its inventory.
The firm said it now makes an average monthly saving of 4 per cent on its inventory, while also satisfying 8 per cent more demand. Product distribution decisions are also now taking just an hour instead of a week.
Its AI system also identifies where potential gaps in its inventory might open, and automatically orders replenishment to prevent them from materialising.
Peel Hunt analyst Andew Nussey said: 'We are convinced that Speedy's AI leadership has substantial customer as well as company benefits. We strongly suspect a large number of less well-prepared peers will be increasingly mindful of Speedy's accelerating competitive advantage in this area.'
Speedy's chief digital and transformation officer Paul Jackson told This is Money: 'AI enables Speedy to optimise its operations, target high-impact areas where there are strong growth and efficiency opportunities, and make decisions quickly and accurately. This not only provides cost benefits but also allows us to better serve our customers.
'By analysing more than 300 billion data points each day, we identify trends that we wouldn't otherwise have seen easily and make rapid decisions that significantly improve processes across the business.'
Software company Netcall provides customers with a system that can monitor appointment data in real time.
For its healthcare customers, such as NHS trusts and social care firms, this means reduced waiting lists, and an ability for staff to allocate their time to the most important tasks.
The company is inevitably cautious of the potential risks of the AI making a wrong decision, so is keen to ensure that it uses the tool to aid human judgement - rather than replacing it altogether.
Wotton said: 'Netcall ensures safety and effectiveness by advocating for a balanced integration of AI, which includes human oversight. This strategy optimises operations and safeguards against potential pitfalls in data protection and privacy.'
An alternative model
Instead of jumping on the AI integration bandwagon, real estate trust Segro is looking to grasp onto the coattails of the AI boom, and instead target growth by meeting the growing demand for new data centres.
Earlier this year, the firm said it will develop 24 new data centres across the UK and Europe, and is planning to invest much of its £900million equity raise to do so.
According to real estate consulting firm JLL, the global market for edge IT infrastructure and data centre market is expected to reach $317billion by 2026, more than double its value four years ago.
By 2028, the European data centre market is projected to triple in size.
Back in March, Tom Glover, head of data centre transactions for the EMEA region, JLL, said: 'In a world increasingly fuelled by the internet, data, and artificial intelligence, demand will continue to rise for the real estate to make it all happen. We saw record levels of take up, demand and preleasing for data centres in 2023, and expect 2024 to be another staggering year for activity in the sector.'
Freeing up time for employees
Companies are also adopting AI as a way to replace or speed up menial or time-consuming tasks.
Consumer review website Trustpilot has integrated AI into its systems in order to both recognise fake reviews, which have long plagued the site, and rank reviews in terms of relevance.
Chris St John, lead manager on the AXA Framlington UK Mid Cap fund, said: 'At its core, Trust Pilot is trying to promote businesses, encourage people to trade with them online and trust them as a counterparty.
'But if you take it a step further, it should learn about how businesses improve their own customer service - to do that, it needs to benefit through huge amounts of data and information that gets provided by the customer base.'
The firm launched its AI features in April and has since said it expected annual recurring revenue to increase by 17 per cent to £78million.
Recruitment firm Robert Walters is also looking to make the most of AI to reduce the number of time-consuming tasks that need to be completed by its consultants.
The introduction of AI means that drafting job advertisements, legal documents and conveyancing are all now completed autonomously.
Freeing up more time for its human employees means that they can spend longer developing relationships with clients and candidates.
St John said: 'The similarity with a lot of these businesses is they are very data rich. They have huge amounts of data - but data is absolutely worthless unless you can turn it into information. AI is very, very good at that.'
While firms are increasingly able to benefit from AI, as costs fall and systems become more readily available, there are still those that have been slow off the mark in adopting this technology.
Wotton said: 'These tools have the potential to leave businesses that are on the back foot trailing, while enhancing those that are on the front foot to drive productivity, scalability, efficiency and customer experience gains.
'It is clear that AI is relevant to businesses of all sizes and sectors. Management teams need to be bold in embracing AI in a way that best suits their business: those that do not will ultimately be left behind.'
