Munro Partners portfolio manager Qiao Ma predicts 2025 will be a pivotal year for artificial intelligence (AI), and the role it plays in companies of all sizes, particularly those outside the traditional technology sector.

Qiao Ma’s comments follow her recent research trip to Chicago which focused on identifying fast-growth companies within many of their key Areas of Interest such Climate, Security and Innovative Health.  

"While AI has been a dominant investment theme recently, its benefits are broadening beyond large tech companies," Qiao Ma says.

"We're seeing smaller, innovative companies leverage AI in transformative ways, creating significant growth potential."

Qiao Ma met with numerous companies at the forefront of AI innovation. She cites AeroVironment, a small defence company that focuses on unmanned surveillance and ammunitioned vehicles and says: “AeroVironment’s equipment does not require extensive training for human operators; its software solutions, enabled by AI, are very intuitive and easy to use.

She also met with RadNet, a leading diagnostic imaging service provider, which uses AI to improve cancer detection accuracy.

"These are just two examples of how AI is revolutionising diverse industries," she explains. "We believe this trend will accelerate in the coming years, creating compelling investment opportunities across a range of sectors."

Qiao Ma also observed growing momentum behind the "Made in America" theme.  She says there is an industrial renaissance in the US, and believes that robotics and automation will play a crucial role in revitalising American manufacturing by mitigating labour cost concerns.

"Robotics is key to enabling companies to compete globally while maintaining production in the US," she says.

She emphasises the opportunities of investing in companies focused on grid capability and energy transition. "The world is facing an escalating energy challenge," she says. "Companies that are developing solutions to modernise our energy infrastructure and accelerate the transition to clean power will be critical to meeting this demand."

Qiao Ma says her research trip reinforces her conviction that diligent analysis of small and mid-cap companies can uncover exceptional investment opportunities.

"Many of these companies are overlooked or misunderstood by the broader market," she says. "By identifying those with robust earnings growth potential and innovative business models, investors can potentially achieve significant returns."