With US manufacturing data signalling ongoing softness relative to expectations, investor attention is drifting toward sectors that do not rely solely on traditional industrial demand. Artificial intelligence sits at that crossroads, where chips, software and cloud meet new productivity tools like ChatGPT. This article walks through 3 of the most interesting stocks from our AI Stocks screener so you can see how different business models plug into the same long term theme.
Those three stocks are just a starting sample from this theme, and the full screen surfaced 16 more companies with equally compelling AI narratives that are not covered here. If you want to quickly identify your own angles on this trend, head straight to the Artificial Intelligence/ AI Stocks screener to filter and analyze the highest conviction plays.
SEEK (ASX:SEK)
SEEK is a Melbourne based online employment marketplace that uses AI powered job ads and candidate matching tools like its Advanced ad product and Talent Search engine to help employers find suitable hires more efficiently. The business is still anchored in employment marketplaces, with A$945 million of revenue from ANZ and A$253 million from Asia, and AI features are embedded within this broader job ad and sourcing toolkit rather than being a standalone segment. At a market cap of about A$5.2b, SEEK is a large listed player in the recruitment and HR tech space.
SEEK gives you exposure to AI where it is already embedded in day to day workflows, as hirers pay for better targeting and faster hiring decisions through Advanced ads, Talent Search and linked tools like JobAdder. ANZ remains a high yielding, cash generative jobs business, while Asia is still at an earlier stage, so stronger digital adoption could change the revenue mix over time. The flip side is that SEEK is currently loss making, carries meaningful debt and is investing heavily in AI, product and platforms like Sidekicker. Execution on monetising these tools and lifting margins therefore matters. For investors seeking exposure to recruitment software that is integrating machine learning into its products, SEEK may warrant closer consideration.
SEEK's AI push in job matching and its loss making, debt funded profile raises a simple question. Is the risk being priced fairly, or are investors missing a key twist in the 2 key rewards and 2 important warning signs
Xero (ASX:XRO)
Xero is a cloud based accounting and business platform that helps small businesses handle bookkeeping, payroll, payments and tax, with Syft providing AI driven reports, forecasts and dashboards that tie it directly into the ChatGPT and analytics theme. The company reports a single line of revenue from providing online solutions for small businesses and their advisors, which reached about NZ$2.8b across Australia, New Zealand, the UK, the US and the rest of the world. Xero is a large listed software stock with a market cap of roughly A$15.2b.
For investors interested in practical AI inside real workflows, Xero brings Syft's AI insights together with its core accounting, payments and payroll tools, plus newer JAX and agent features that plug into Microsoft 365, Claude and ChatGPT. Forecasts for earnings and revenue growth point to potential operating leverage if AI features deepen customer usage. However, recent margin pressure, a high P/E and dependence on higher risk funding sources indicate that the path may include challenges. Management turnover and a relatively fresh leadership team also raise questions about execution as Xero focuses on the US and scales its AI stack. One key consideration is whether the current price reflects the value of an AI powered small business operating system.
Xero's AI story and US focus may be shifting faster than most investors realise. Yet the real tension sits in how funding, margins and pricing power intersect in the analyst forecasts for Xero
CAR Group (ASX:CAR)
CAR Group runs online vehicle marketplaces and related services across Australia, Asia, Latin America and North America, and is weaving AI into its automotive data, valuation and inspection tools to personalise listings and speed up transactions. Revenue is anchored in Australia at about A$518 million, with A$327 million from North America, A$253 million from Latin America, A$145 million from Asia and A$11 million from investments, so the AI work currently sits within a broader classifieds and advertising engine rather than driving most of the top line. At a market cap of roughly A$11.1b, CAR Group is a sizeable listed player in global auto classifieds and data services.
Investors who want AI exposure beyond chips and pure software may find CAR Group interesting because its machine learning work is wrapped around real world assets, using vehicle valuations, inspections and personalisation to sharpen how cars are priced and sold across its marketplaces. The company reports double digit revenue and EBITDA growth in FY2026 and is guiding to 11% to 14% revenue growth in FY27, while net profit margins around 25% and strong cash generation give it firepower to fund these projects. The trade off is high leverage, dividends that are not fully covered by earnings and rising technology spend, which means the payoff from its AI data products and early stage investments really matters for long term returns.
CAR Group's accelerating AI work in valuations and inspections could be doing more than supporting classifieds revenue. Get the full picture on growth, cash generation and leverage in the analysis report for CAR Group
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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