Shore Capital has flagged Kainos Group PLC (LSE:KNOS) as one of its top UK-listed stocks to watch as artificial intelligence continues to reshape the software and IT services sector.
In its latest thematic note on AI, the broker highlighted a shift in focus from headline-grabbing innovations to more gradual, deep-rooted changes in how businesses operate and deliver value.
At the heart of this transformation is the rise of what Shore describes as agentic AI, systems that don’t just respond to instructions but can autonomously plan, reason and act towards complex goals.
Unlike earlier generations of AI that required specific prompts for each task, agentic models behave more like digital collaborators, adapting dynamically and breaking down work into smaller steps with minimal human input.
Transformation in store?
The broker cited McKinsey’s view that agentic AI could become a “transformation play” rather than just an efficiency driver, with potential to unlock major productivity gains in customer services, logistics and IT operations.
Kainos, alongside peers such as TPXimpact and Softcat, is seen as well-positioned to benefit from this trend.
These firms, Shore Capital said, are operating in the most monetisable layers of the AI stack, particularly in compute and cloud infrastructure, but also stand to gain from rising demand for AI integration in software and services.
Shore Capital's broader list of UK picks includes Bytes Technology Group PLC (LSE:BYIT, JSE:BYI), Craneware PLC (AIM:CRW), Eagle Eye Solutions Group PLC (AIM:EYE), Trainline PLC (LSE:TRN) and Softcat PLC (LSE:SCT).
These companies fall into what the broker calls the “picks and shovels” category, meaning they are not building AI models themselves but are supplying the tools, platforms or services that enable the wider ecosystem to function.
Physical AI
Among emerging trends, Shore spotlighted the rapid progress in physical AI, which includes systems that can perceive and interact with the real world, such as autonomous vehicles and industrial robots.
It also pointed to growing adoption of AI in areas such as healthcare diagnostics, public sector operations and supply chain management.
The broker also named HeyGen as its “disruptor of the month” for a new AI video tool that lets users generate professional-quality videos simply by describing their ideas in natural language.
The chat-based agent handles everything from scripting and voiceover to editing and rendering, potentially saving users thousands of dollars and compressing days of production into minutes.
Looking ahead, Shore expects a wave of AI-native software IPOs in 2025 and 2026. This follows the strong market debut of Coreweave, whose shares have already risen more than 250% since listing in March.
While investor attention may have moved on from the initial excitement around generative AI, the broker sees a “quiet revolution” underway. One that could deliver lasting changes in how economies function and where long-term returns are generated.