Investing in AI: the Λnβro approach

I thought it might be interesting to dig a little deeper into the Artificial Intelligence (AI) phenomenon that has gripped markets and the world over the last couple of years and give a sense of how we at Λnβro Capital Investments have approached this theme.

There are, of course, varying views around AI and how it has the potential to transform and disrupt our way of life – not all of which are necessarily positive. With step changes in technology such as these, which have the potential to leapfrog us to new and often uncharted territory, it’s important to think long and hard about how all the various puzzle pieces come together to make up this new iteration of our world.

Digging into AI

At its core, AI involves computer systems designed to perform tasks that require human intelligence. AI has applications across various fields, including healthcare, finance, autonomous vehicles, robotics, and more. With this vast array of resources at its disposal it makes sense to assume that the rate of growth in certain industries has the potential to step change higher.

Many companies are already seeing significant increases in revenue based on the investment cycle (in most cases this is confined to the infrastructure providers of the technology at present). However, as the use cases expand, and funds are expensed, the potential overflow into other industries begins to take shape. The use of which is far ranging from healthcare and finance to manufacturing. These can create a potential flywheel as technology continues to advance so that it allows for ongoing breakthroughs which may in turn lead to new products and services in future.

Its development raises important ethical and societal questions about privacy, job displacement, and the future relationship between humans and machines. These are things we cannot ignore and so need to constantly be vigilant around how and where the technology is being used. Which systems we use are also important and using more than one is prudent to ensure different versions are assessed and vetted.

How to invest in it

We have different portfolios at Λnβro and as a result, investing in AI is approached in several ways. The portfolio you choose to invest in is determined by your risk tolerance, investment goals, and expertise. To this end, we have divided our investment universe into several categories for which we then screen and research for potential addition to our portfolios. Each category has a cautious, balanced and growth option allowing each underlying portfolio the ability to take on the theme we would like exposure to.

Here are some examples of the categories we have identified.

AI Trailblazers

Companies here are at the razor edge of AI technology and innovation. They spend a considerable amount of time, money, and research on the theme. By doing this they collect various forms of intellectual property, patents and technologies and are driving the phenomenon into the market by selling products and or services.

Growth Pick: Tesla

Balanced Pick: Nvidia

Cautious Pick: Apple

AI Utilisers

Instead of developing or selling these technologies as their core business these companies use the technology to improve the products or services that they provide or offer to customers. Streamlined processes, quicker turnaround times, enhanced performance of offerings are some of the things that companies utilising AI are after.

Growth Pick: Uber

Balanced Pick: IBM

Cautious Pick: JPMorgan

AI Authorities

These businesses focus on specific technologies. They have a core business centred around these technologies and have made significant investments in R&D and research to ensure that they have a unique and market-leading approach to their offerings.

Growth Pick: Zscaler

Balanced Pick: Arista Networks

Cautious Pick: Salesforce

This is, as you can imagine, a constantly evolving process and many stock ideas are screened for potential inclusion. Looking at the concise list above, however, allows you to easily get a sense of how things like company size and industry correlate to things like whether we would consider them a Growth, Balanced or Cautious investment.

It is certainly an exciting time to be investing in AI and its respective applications and we are constantly on the lookout for new and exciting ways to get exposure to the opportunity.

Read more about Λnβro’s three AMCs here – 

Λnβro Unicorn Global Equity AMC

Λnβro World’s Biggest BRNDZ AMC

Λnβro Dynamic Compound AMC 

All three are crafted for investors who have a capital-growth mindset and a long-term investment profile.