Questor share tip: the quality of this company’s data is what separates it from others aiming to cash in on the technology
As investor excitement about the potential profits from artificial intelligence (AI) has reached fever pitch this year, Questor has remained wary. In June, this column cautioned over the soaring shares of companies linked to AI that had led to some becoming grossly overvalued.
But while an AI bubble remains a growing risk, the technology does have the potential to improve the efficiency, productivity and profitability of businesses which use it wisely. For investors, the challenge is to find companies that could benefit significantly from AI but whose shares have not been caught up in the stock market fervour.
Questor believes it has identified one such company in Relx, an analytics specialist which provides data to businesses, healthcare professionals and governments. First tipped as a buy in this column in February 2018, the shares have risen 70pc since, outperforming the FTSE 100 by 69 percentage points.
AI has the potential to enhance Relx’s analysis of the vast pools of high-quality data it controls yet its shares, while not cheap at 22 times forecast earnings, have not been swept up in the hype over the technology.