Daily Stock Pick for June 8, 2023

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