In the rush to work out where artificial intelligence fits in, Shore Capital’s latest research suggests the UK market is quietly carving out a global leadership role, particularly in the area of software and IT services.
The report doesn’t focus on Silicon Valley’s front-page showboating, but instead highlights how listed British firms are helping businesses get AI to actually do something useful.
This is less about the buzzwords and more about implementation: ‘picks and shovels’ as they call it in tech speak.
Plumbers, not builders
Companies such as Bytes Technology Group PLC (LSE:BYIT, JSE:BYI) and Softcat PLC (LSE:SCT) don’t build AI themselves. Rather, they supply the plumbing, software, cybersecurity, and infrastructure that organisations rely on to deploy these powerful tools.
Bytes (rated Buy) is the standout. Its recent results showed double-digit growth, underpinned by its push into AI services.
Bytes doesn’t break out AI-specific numbers, but it’s clear the trend is helping rather than hindering. They’re investing in skills and software to keep up with growing demand for smart automation.
Softcat (Buy), meanwhile, has made its first acquisition, a data consultancy, to deepen its AI credentials. It too has upgraded its growth outlook twice in recent months. Like Bytes, it enables others to get AI-ready.
Kainos (Buy) has gone even further. It’s a top supplier of AI services to the UK public sector and has delivered over 250 AI projects. Revenues from this line jumped 61% last year.
Heavy lifting
Kainos isn’t flashy, but it’s doing the heavy lifting, automating admin in hospitals and government departments, helping to save money and improve outcomes.
Craneware (Buy) and Eagle Eye (a Shore Cap 'House' stock) are also building momentum. Craneware focuses on healthcare billing and digital twins, essentially simulations of hospital operations to find efficiencies. Eagle Eye is leaning into AI-driven personalisation for retailers.
Trainline (Buy), better known for selling rail tickets, is embedding AI into customer service. It recently launched an AI-powered travel assistant and is exploring new ways to boost ticket sales using generative technology.
All about the tools
Others on the Shore Cap watchlist include TPXimpact, which is advising councils on how AI can speed up planning decisions, and Made Tech, which is working with the Department for Business & Trade on data platforms.
The overarching theme is that British firms are less about creating the next ChatGPT and more about making sure tools like it actually get used properly. Investors looking for exposure to AI might consider these enablers: firms that supply the kit and services others need to adapt.
It’s also worth noting that the UK is the third-largest AI market in the world.
Between strong academic roots, government support, and a crop of promising companies, the conditions are ripe for further growth.
What’s more, as AI transitions from hype to proper deployment, the companies helping make that happen could be the most dependable beneficiaries.