The threat that artificial intelligence poses to the market dominance of leading industry suppliers Aristocrat and Light & Wonder has been overstated in their current valuations, with investors failing to adequately price in the strength of their land-based EGM businesses, according to Morningstar.
In a Tuesday note, the financial services company also pointed out that although the digital businesses of Aristocrat and Light & Wonder were somewhat vulnerable to the widespread use of AI by competitors, their land-based presence remains much harder to crack.
The commentary from Morningstar analysts Angus Hewitt and Leo Wang follow a recent sell-off in shares of the two ASX-listed suppliers amid fears of disruption from AI – specifically that AI will lower the barrier to entry, produce new competitors and strengthen weaker incumbent competition.
