Continuing the theme of recession-resistant stocks, today let’s look at a counterintuitive merging of the two worlds – stocks that can benefit from AI AND are recession-resistant as well.
On the surface, that doesn’t seem to make sense.
AI stocks are generally high-flying tech names – names that typically get hammered in a recession.
Meanwhile, the stocks generally thought of recession-resistant operate in industries that consumers generally cannot do without. And, for now at least, AI is most definitely not on that list.
So today’s pick is definitely a counterintuitive one that’s sure to surprise many of you. But after you see the rationale, I do believe you’ll consider it a pleasant surprise.
Walmart Inc. (WMT)
I know what you’re thinking – Walmart… AI… huh? I don’t blame you.
But first, let’s get the recession-resistant aspect out of the way. I think that part’s pretty obvious.
This retail titan has a long track record of being extremely resilient during recessions, with its revenues and sales barely taking a hit. In fact, in 2007 and 2008, Walmart reported revenue growth of 10% and 9% respectively – which were 2–3x its usual numbers.
So where does the AI part come in?
Well, according to a recent report by multinational investment bank UBS, Walmart is actually a top beneficiary of the advancements being made in the field of AI.
How? Well, here are just a few examples:
- Ensuring that the product the customer wants is always in stock
- Intelligent floor scrubbers that also take over 20 million photos of inventory every day
- Algorithms that tell employees exactly where and how to move product units to maximize their productivity
- Improving customer experience on the Walmart app
And here’s more good news. Because Walmart is definitely not a name most investors would associate with AI – you now have an advantage.
Because once the AI train fully takes off – and people realize just how much AI is benefitting Walmart – you could already be onboard.
To your wealth,
Felix @ Ace of Investing