Daily Stock Pick for July 27, 2023

For today’s stock pick, we’re going back to the hottest theme of 2023 – AI.

But this AI stock is different.

Unlike other AI stocks, it hasn’t surged in price (yet). In fact, while its price has increased, it’s actually underperformed the broader market.

To me, this is unwarranted, because this company s using generative AI to add actual value a $14 trillion industry – and it’s already profitable

The missing ingredient appears to be investor attention.

The type of generative AI this company is using – while undoubtedly useful – is slightly different from what’s being hyped right now.

But make no mistake, the AI hype WILL die down. Investors will be forced to separate AI products that add actual value from those that are just pretty facades.

And when this happens, companies like today’s stock pick will win big.

Autodesk, Inc. (ADSK)

Autodesk is a software company that makes products for the architecture, engineering, construction, manufacturing, media, education, and entertainment industries. Its main focus is the construction industry – a global market worth over $14 trillion every year.

Even before all the generative AI hype, Autodesk was already using generative AI in its products – although it’s quite different from what is popularized by ChatGPT.

What Autodesk’s generative AI software does is run simulations for engineers – building them structures and 3D animations – and creating massive productivity gains for the industry (one Autodesk executive estimates that such generative design can quadruple or quintuple productivity).

Add this to the fact that the construction industry is one of the least-digitized in the world – and you have an undervalued company with a generative AI product that is delivering actual value to a massive yet underdigitalized industry.

As I said, once the AI mania is over and investors start looking for AI companies delivering actual value – Autodesk’s name will be right at the top. And considering its underwhelming stock price thus far, now may be a good time to get in, before all eyes turn to this stock.

To your wealth,
Felix @ Ace of Investing