Investing

AI Agents are Here and These Stocks Stand to Profit

Joey Frenette

Published: January 30, 2025 1:00 pm

As the AI ascendency moves further into the new year, new themes, surprises, breakthroughs, and perhaps market-moving shockers, like China’s recent DeepSeek AI model release, are to be expected. Undoubtedly, the field of AI is moving rapidly, with huge headlines coming out of the space seemingly on a weekly basis. Indeed, for many investors, it’s a lot of new news to digest and a great deal of uncertainty for those who don’t know how to interpret new AI developments and their impact on the macro environment.

In any case, those seeking to place big AI bets at today’s valuations should be fully informed of new advancements and trends so that they’re able to better tell the difference between a seemingly expensive value play and a name whose price of admission may still prove excessive. In any case, value-minded investors should embrace the AI-driven wave of market volatility. After all, volatility can open doors to better value opportunities for those who look beyond the headline to the true long-term impact of a firm, sector, or theme in question.

If we are in for more days like Monday, which saw a DeepSeek dive in the tech sector, investors should be ready to make the right moves with a clear mind while others panic when confronted with developments that they cannot understand. Knowing what you’re investing in is the key takeaway, especially as the AI trade enters its third year.

Personally, I view DeepSeek’s AI breakthrough as a spark that accelerates the rise of agentic AI, a critical stepping stone, at least in my view, toward AGI (artificial general intelligence).

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Is this the year of the agentic AI boom?

As you may remember, the “AI” term was used excessively in the early innings of the AI race. Now, expect terms like “agentic AI” or “AI agents” to start popping up in conference calls and other commentary from tech executives. Indeed, it’s a hot topic and one that marks the beginning of a whole new race. With the kick-off of the AI agent race, investors should know the less-appreciated stocks to look for as some of the semiconductor names fade at the hands of the falling cost of AI computing.

Indeed, cheaper AI computing could mean a usage boom for the software firms that are betting big on autonomous agents that can make wise decisions independently based on data. Undoubtedly, time will tell how much value there is to be unlocked by these autonomous systems as they become more commonplace in the enterprise. Either way, the shift to AI agents is a profound one that could pave the way for a new class of winners. Here are two to keep on your radar as agents become the talk of the town:

Amazon

It’s not always easy to tell which firms can profit from a fast-rising technology like agents that few consumers have yet been exposed to. When it comes to profit-driving agents, I will look at a name like Amazon (NASDAQ:AMZN), which knows how to use new tech to make money either by creating new markets or going after existing ones with an unbeatable (or very hard-to-beat) value proposition.

When it comes to AI agents, Amazon may be its own biggest customer as it seeks to automate an increasing portion of its business. Whether we’re talking about optimizing and automating decisions made in the supply chain, logistics, software development, or advertising, there’s no shortage of cost-savings and sales-growth-driving opportunities for agents to go after.

Perhaps effective agents could transform Amazon from a capital-intensive tech juggernaut to a behemoth with best-in-class margins and profitability. At 50.5 times trailing price-to-earnings (P/E), shares seem somewhat pricey today. However, if Amazon can get agents right, the seemingly high multiple may prove low, given the magnitude of longer-term agent-induced earnings-driven multiple compression that could be around the corner.

Moody’s

Moody’s (NYSE:MCO) is probably the last firm you’d think of when you hear of AI agents. In any case, the company stands to gain a lot as agents dig through the massive troves of data to come up with a figure that describes an entity’s credit risk. Indeed, the rise of agents and advanced AI-driven data analytics could make Moody’s incredibly wide moat that much wider.

In any case, the big question is when the AI profitability gains will arrive. It’s tough to tell at this juncture, but if you’re in it for the long term, I’d argue the wait is likely to be more than worthwhile. At 36.6 times forward price-to-earnings (P/E), shares still seem cheap for those seeking an underrated AI beneficiary that has ground to gain as it gets a hand from what Moody’s refers to as a digital colleague, one that could make the profitable financial services titan even more profitable.