UK stocks to exploit the AI revolution
It’s not all about Nvidia and other American artificial intelligence leaders, according to this City analyst who names the British companies well placed to benefit from rising demand for AI.
23rd September 2025 15:21
by Graeme Evans from interactive investor
UK-listed “trailblazers” including Kainos Group (LSE:KNOS), Softcat (LSE:SCT) and Trainline (LSE:TRN) are among the top picks after a City bank reviewed opportunities as AI shifts from “hype to monetisation”.
Shore Capital also likes Craneware (LSE:CRW), digital transformation specialist TPXimpact Holdings Ordinary Shares (LSE:TPX) and Eagle Eye Solutions Group (LSE:EYE) amid a preference for the “picks and shovels” category of AI beneficiaries or where there’s potential to enhance an already positive investment case.
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The bank points out that the UK is the world’s third largest AI market, behind only the US and China. It is home to a growing number of AI unicorns, such as StabilityAI and Tractable, as well as ongoing policy efforts to shape global AI safety standards.
The report comes a week after Britain and the US agreed a technology pact to boost ties in AI, quantum computing and civil nuclear energy, with top firms including Microsoft Corp (NASDAQ:MSFT) pledging £31 billion in UK investments.
Shore said: “For investors, this creates a positive backdrop: a mature, innovation-rich environment with global influence; not to mention a vibrant UK-listed panoply of opportunities.”
The bank points out that IT services specialists are often overlooked for the critical role they play in translating AI ambition into operational reality.
These firms provide the technical expertise, infrastructure and project management capabilities needed to integrate AI into existing systems and workflows, particularly across complex, regulated or legacy-heavy industries.
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Shore said: “We see strong execution and positioning from UK-listed names such as Kainos, Softcat and TPXimpact, which are well placed to benefit from rising demand for AI-enabled transformation across both public and private sectors.”
Kainos offers AI exposure through digital transformation services, especially in workflow automation for public sector clients. With deep experience in regulated environments and a strong client base, including the MoD and NHS, it has delivered over 250 AI projects to date.
The shares are up 10% this year after Kainos published a strong update at the start of September, whereas fellow Buy-rated Softcat has fallen sharply since June.
Having raised 2025 earnings guidance and grown AI-related client engagement, Shore said Softcat had positioned itself as a key enabler in the AI ecosystem.
On TPXimpact Holdings, the bank said the AIM-listed company was using practical AI applications, such as natural language processing and cloud analytics, to improve cultural heritage archiving, metadata and accessibility.
It adds: “The company looks well positioned to benefit from increased demand for ethical and effective AI implementation across the public sector.”
Craneware, which provides technology that improves financial performance in the US hospital and health system markets, has been using AI across its product portfolio to streamline workflows and optimise revenues.
Its Chargemaster product recently received Microsoft's AI for Healthcare certification.
Software as a Service company Eagle Eye powers loyalty and customer engagement solutions in the retail, travel, and hospitality sector. Its AIR cloud-based platform has built up a deep knowledge of industry needs and requirements.
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Joint broker Shore said revenues rose 30% last year after the AIM-listed company signed new clients and grew its pipeline with some of the most successful retailers worldwide.
It adds: “This is a statement to the industry’s demand for the AI offering and management sees continued strong growth over the coming year.”
Other recommendations include FTSE 250-listed Trainline, whose new AI travel assistant offers live end-to-end customer support and rail expertise.
Shore said: “The company views AI as a key component for scaling the business and improving platform functionality. Trainline is also exploring generative engine optimisation to build demand, which includes a new partnership with ChatGPT.”
The bank also highlighted Buy recommendations on accesso Technology Group (LSE:ACSO) and Alfa Financial Software Holdings (LSE:ALFA). It did not provide price targets in today’s report.
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