Société Générale is advising investors to stay the course with artificial intelligence, arguing that the bull market is entering a new phase where rewards extend far beyond simple hardware. According to Manish Kabra, the bank’s chief US equity strategist, the initial frenzy over infrastructure is now broadening downstream. While early gains were driven by those building the foundation, value creation is shifting toward companies that can actually monetize these tools and businesses that see direct productivity boosts from adopting them.
To navigate this evolution, Kabra has introduced a three part strategy designed to capture growth at different stages of the ecosystem. The first pillar remains focused on the builders, encompassing everything from chip giants like Nvidia and equipment makers like Applied Materials to the essential support systems provided by Arista Networks, GE Vernova, and Vertiv. This group continues to benefit from massive capital expenditures as hyperscalers race to expand their digital footprints.
Moving past the hardware, SocGen highlights the sellers who are turning AI capabilities into recurring revenue. This category includes cloud titans such as Microsoft and Google, alongside specialized players like CrowdStrike in cybersecurity and Salesforce in enterprise software. Even Tesla falls into this bucket through its pursuit of physical AI. The emergence of agentic AI models suggests a shift toward autonomous tools that could spark another wave of corporate spending as firms seek to integrate smarter assistants into their daily operations.
Finally, the playbook identifies the end users who stand to gain higher margins by integrating AI into their core business models. By analyzing companies with rising earnings per employee and strong revenue potential, SocGen pointed toward leaders in financials, healthcare, and industrials. Top picks for this efficiency play include JPMorgan Chase, Eli Lilly, and GE Aerospace, signaling that the ultimate winners of the AI revolution may be traditional industry giants who successfully leverage technology to lean out their operations.
