In the rapidly evolving landscape of artificial intelligence (AI) investment, it is paramount to discern genuine opportunities from mere hype. Drew Pettit, the Director of U.S. Equity Strategy at Citi, shares his nuanced perspective on navigating the dynamic AI market and capitalizing on its potential.

Pettit’s expertise lies in deciphering the complexities of AI investment, particularly in distinguishing companies leveraging AI from those merely paying lip service to the trend. In a recent interview, Pettit emphasized the importance of a rigorous, data-driven approach to identify the genuine beneficiaries of the AI revolution.

“As we broaden our exposure to the AI sector, we must remain vigilant,” Pettit cautions. “Many companies claim to have an AI play, but our fundamental analysts are adept at separating the wheat from the chaff.”

At the heart of Pettit’s strategy lies Citi’s robust toolkit, which integrates fundamental analysis with thematic tagging by individual stocks. This multifaceted approach allows Pettit and his team to assess companies’ underlying fundamentals while tracking their commitment to AI innovation.

“Fundamental analysis is essential,” Pettit explains. “But we need to look beyond the surface in the AI space. We need to discern which companies truly integrate AI into their business models and drive meaningful value.”

While tech titans like Amazon and Google have long dominated the AI narrative, Pettit notes a shift in market dynamics. Fluctuations in their stock prices signal investor skepticism. “The AI landscape is evolving,” Pettit observes. “We must look beyond the obvious players and identify emerging opportunities.”

Pettit’s recommendations extend to value investors seeking exposure to the AI market. He highlights companies like RTX, an IT services provider enabling business AI adoption. “RTX offers investors a unique entry point into the AI space,” Pettit explains. “By reselling AI software and facilitating its integration, they’re positioned for sustainable growth.”

Moreover, Pettit underscores AI’s transformative potential in industrial sectors. Companies leveraging AI technologies to optimize manufacturing processes and enhance product offerings stand to gain a competitive edge. “AI isn’t just about tech giants,” Pettit emphasizes. “It’s about industries embracing innovation to drive efficiency and growth.”

As investors navigate the complexities of the AI market, Pettit’s insights serve as a beacon of clarity. His data-driven approach, coupled with strategic foresight, offers investors a roadmap to capitalize on AI’s transformative potential. By identifying companies with genuine AI capabilities and a commitment to innovation, investors can position themselves for long-term success in the AI-driven economy.

“Investing in AI requires discipline and discernment,” Pettit advises. “But for those willing to look beyond the hype, the opportunities are boundless.”