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By Paul R. La Monica

Alphabet may have pulled ahead of OpenAI in the battle for artificial-intelligence supremacy. But Alphabet, whose stock has surged more than 15% in just the past month thanks to the launch of its Gemini 3 AI model, isn't the only company that stands to benefit from the shifting tides in AI.

Jordi Visser, a senior managing director for 22V Research, said in a report last week that the rise of so-called Vision Language Models, which can process and learn from images and video as well as text, should be great news for Tesla, thanks to its focus on robotics. Traditional energy and utility companies stand to gain as well, he wrote.

The reason? More enhanced AI functionality will require even more power. That means companies such as the gas-turbine leader GE Vernova and electrical components maker Eaton, which Barron's has written about as industrial winners from the AI boom, could also be good bets.

"The next phase of AI isn't about more datacenters, it's about power infrastructure, flexible demand, and physical-world automation," Visser wrote. He added that individual investors have already caught on to this trend, as evidenced by Alphabet's rally as well as a recent pop in Tesla, which is up nearly 11% in the past two weeks.

"Retail saw it first," he wrote. "Institutions are being dragged there next."

Visser elaborated on his analysis in a YouTube video, arguing that current AI leaders like the chip company Nvidia and cloud-computing firm CoreWeave, along with OpenAI, may not remain on top as the market shifts more toward VLMs over large language models.

Nvidia, for example, is down nearly 10% in the past month as Alphabet has rallied. "There will be different winners," he said.

The healthcare sector will be another big beneficiary of AI, Visser believes. He argued that AI should lead to pharmaceutical and biotech companies being able to eliminate more diseases as testing and research becomes more efficient.

"Drug discovery is just one part," Visser said in the video, noting that AI can lead to lower medical costs and longer life spans thanks to the "confluence of gene therapy, robotics and diagnostics accelerating." Visser also pointed out that the AI start-up Anthropic, the developer of the Claude LLM, has been hiring more life science researchers as of late.

Investors have taken notice too. Pharma and biotech stocks have shown recent signs of life after lagging behind Big Tech and the broader market for most of this year. Part of the problem has been worry about crackdowns on drug pricing and regulation from President Donald Trump and Health and Human Services Secretary Robert F. Kennedy Jr.

The State Street SPDR S&P Pharmaceuticals and State Street SPDR S&P Biotech exchange-traded funds are up 9.5% and 13%, respectively, in the past month. "The market has spoken," Visser said.

Of course, the market could change its mind. Shares of Microsoft, which has a big investment in OpenAI, outperformed Alphabet for most of this year. But Alphabet's stock has picked up steam in the past three months.

And Nvidia was still the top-performing Magnificent Seven stock as recently as early November. Fortunes can change quickly: Today's winners may not be Wall Street's AI darlings a few months from now.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Al Root

GE Vernova has been a surprise AI winner, providing equipment that will power data centers now and in the future. Investors will get a look at how bright that future looks when management meets with investors next week.

Expectations are running high. For now, investors appear to be taking some profits ahead of the big event, slated for Dec. 9.

Shares of the power-generation and grid-technology company were down 3.7% at $579.39 in early trading, while the S&P 500 was down 0.1% and the Dow Jones Industrial Average was up 0.2%.

That left GE Vernova shares flat over the past month, but still up 76% year to date. GE Vernova split off from GE Aerospace in early 2024, with shares starting out at roughly $140 apiece.

Things simply got better faster than anyone imagined. Wall Street currently projects 2028 earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $9.4 billion, according to FactSet. At the time of the spinoff, that estimate was closer to $4.6 billion.

There is only one problem with the 2028 projections. They are far ahead of company guidance. At GE Vernova's prior analyst event in December 2024, the company outlined plans to generate roughly $6.3 billion in 2028 Ebitda. Demand for power and power equipment has continued to improve, but the gap represents a risk for the stock heading into the Dec. 9 investor meeting.

Investors are expecting a guidance bump. JPMorgan analyst Mark Strouse surveyed clients and found them "overwhelmingly bullish on [GE Vernova] stock over the next 12 months."

He isn't worried, though. The update to 2028 targets will be important, but it's increasingly "old news...GE Vernova is set up to see many years of growth and margin expansion beyond 2028," wrote Strouse in a Wednesday report. "And that incremental commentary on the 2030s could have the potential to be a more important topic."

Along with being attentive to guidance updates, Stouse is looking for details about GE Vernova's business inside data centers and its capital-allocation plans, including to the company's nuclear business. GE Vernova makes and services nuclear reactors in a partnership with Hitachi.

Strouse rates shares Buy and has a $740 price target for the stock. Overall, 65% of analysts covering GE Vernova shares rate them Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for GE Vernova stock is about $689 per share.

The Street is relatively bullish on GE Vernova. Investors like the stock, too. Now the company has to live up to those lofty expectations.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.