(This is an actual research report from Trivector’s Adam Parker, reprinted for CNBC Pro subscribers with permission. Click here to subscribe to Trivector.) Every month we look at hundreds of transcripts, both systematically and “manually” to identify emerging trends, confirmatory data for existing trends, or data that refutes a current market trend. Obviously, AI is a focal point of all market participants, so we constantly have an eye toward what companies are saying about adoption, impact on business, etc. Walmart (Ticker: WMT) is a bellwether name for the U.S. consumer, but in this instance, it may prove to be a bellwether for low-revenue-per-employee companies and what AI could mean in terms of margin improvement. Walmart has been commenting on AI for several quarters, as have many other companies with an increasing frequency. The company noted: “Daniel Denker has joined us to lead AI acceleration product management, design, tech prioritization, and AI-related change management. Daniel brings tremendous expertise and experience from places like Instacart (company called Maplebear, Ticker: CART) and Uber (UBER). We also announced a new role reporting to Suresh Kumar, our Chief Technology Officer, that will focus on AI platforms. This role will help us increase innovation, speed, and productivity. Own the AI platforms, and architect our intelligent system stack. We’re building agents into the core of how we operate. Including four super agents, there’ll be many agents that roll up to these super agents that our customers, associates, and other stakeholders experience. First is Sparky. Sparky is the customer-facing assistant you see smiling at the bottom of our app. Today, Sparky takes us from traditional search to intelligent AI-powered assistance. Sparky will develop agentic capabilities over time.” The company went on to say: “Our enthusiasm for how AI can help us serve customers and members better, improve the experience for our associates, and increase productivity continues to grow. It’s been years since we made a structural change for a role reporting to the CEO, and we’ve done it in this case because we’re clear on a path to accelerate…Daniel Denker has joined us to lead AI acceleration product management, design, tech prioritization, and AI-related change management. Daniel brings tremendous expertise and experience from places like Instacart and Uber.” Why This Matters Many U.S. companies, like Walmart, can benefit from predicting their employee and customer behavior better, and reducing costs through A.I. deployment. Investors consistently ask us for potential AI productivity beneficiaries – we think a starting point is to look for companies that have a high number of total employees and relatively low margins, under the thesis that some employee leverage or productivity is possible. Potential ideas are shown below. Conclusion It may not even be the early innings of the potential benefits associated with AI adoption – the players may just be warming up! What is clear at this point is that the impact is likely to be felt across multiple industries. The bull case for U.S. equities includes a number of companies growing their revenue with limited to no net hiring. This drives higher margins, and likely higher multiples. The analyst, Adam Parker, responsible for the preparation of this research report certifies that: all the views expressed in this research report accurately reflect the research analyst’s personal views. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
