UK fund manager predicts that new AI winners beyond Big Tech will soon emerge.

• Clare Pleydell-Bouverie, co-lead fund manager at Liontrust Asset Management, is monitoring companies that are close to but not yet part of the top seven tech firms.
• Before you can monetize it, you must first build out the new compute infrastructure, advised Pleydell-Bouverie to cautious AI investors.
• She mentioned companies that produce silicon chips, semiconductor equipment, such as Applied Materials, and those responsible for installing underground cables and networks.

The U.K.-based fund manager predicts that the AI revolution, being the biggest platform shift since electricity, will create investment opportunities for smaller tech firms that are getting closer to the Big Tech giants.

According to Clare Pleydell-Bouverie, co-lead fund manager at Liontrust Asset Management, the winners of the current technology cycle, which began 18 months ago with the ChatGPT moment and the AI revolution, will not be the same as those in the previous technology cycle.

Pleydell-Bouverie stated that the group of Big Tech stocks, commonly known as the Magnificent Seven, which includes Alphabet, Amazon, Apple, Meta, Microsoft, and Tesla, are the opportunities we are highly focused on.

The fund manager describes AI applications as an emerging club of high-value firms, and many of those tech firms are ripe for investment in this growing layer within the wider AI industry.

She stated that this year they have been intensely concentrating on the AI infrastructure component of the new technology framework.

Pleydell-Bouverie advised AI investors to prioritize building out new compute infrastructure before they can profit from it. This includes investing in silicon chips, semiconductor equipment, and firms responsible for laying underground cables and networks, she emphasized.

To scale an AI infrastructure, the 's, the 's, and the 's of this world are all essential components. Additionally, model providers play a crucial role. While these players are generally commoditized, building large foundation models has become a competitive race.

Pleydell-Bouverie stated that engineering firms who bring AI to companies and customers are currently providing value in the AI infrastructure layer, but this will shift up the stack in the next year.

Nvidia 'primary beneficiary' of AI boom

Nvidia will be the driving force behind the AI revolution in 2025, similar to how Apple dominated the smartphone market.

To comprehend Nvidia's role in 2025, investors must see the Magnificent Seven company in a new perspective.

Pleydell-Bouverie stated that the common misconception about Nvidia is that it's a chip supplier. However, examining the company through the lens of a backward-looking hyperscaler capex is incorrect.

In the mid-1990s, Steve Jobs successfully combined a struggling operating system with stylish hardware, paving the way for it to eventually capitalize on the smartphone craze that would occur at the turn of the millennium.

Pleydell-Bouverie sees Nvidia accelerating similarly to Apple.

"From next year, Nvidia is positioning itself as the operating system for the new AI-infused software that we'll start to see in market," she added.

Nvidia has experienced tremendous growth in 2024 due to the ongoing artificial intelligence boom, with its next-generation AI chip Blackwell gaining attention. Its shares have increased by nearly 300% year-to-date, making it one of the world's most valuable companies.