Five years from now, these are the companies everyone will wish they owned

Five years ago, owning the right handful of global technology stocks could transform a portfolio. The challenge today is deciding whether the next five years will reward investors for sticking with those winners or looking somewhere else entirely.

That was the question put to Antipodes Partners Portfolio Manager Vihari Ross and Ophir Asset Management Co-Founder and Senior Portfolio Manager Andrew Mitchell at Livewire Live.

Both believe opportunities remain within AI. But neither thinks the answer is simply buying the companies dominating today's headlines. 

Ross is finding value further down the semiconductor supply chain, in businesses wrongly assumed to be AI casualties and in old-economy companies benefiting from powerful capital expenditure cycles. 

Mitchell, meanwhile, is looking for small and mid-cap companies where earnings, market share or structural advantages matter more than the prevailing narrative.

When asked to nominate the companies investors could wish they owned five years from now, they produced three very different answers: a semiconductor giant, a US senior-living operator, and a little-known software company followed by just one analyst.

The next AI winners might not be the obvious ones

Ross argues the extraordinary concentration of global market returns has created opportunities elsewhere.

Over the past three years, she noted, more than 80% of returns had come from the US, while technology and mega caps accounted for a disproportionate share. Flip that around and the opportunity set becomes considerably more interesting.

“There’s actually opportunity in smaller companies. There’s opportunity outside of the US. There’s opportunity across the tech complex as well, but you’ve got to be selective about where you go.”

Ross isn't bearish on technology, she's simply arguing that investors need to distinguish between companies vulnerable to AI disruption and those whose data, distribution, workflow integration or infrastructure provide genuine moats. 

Mitchell is taking a similar approach in small and mid-caps, looking for companies where Ophir believes it has identified something the broader market hasn't.

One example is CareDx (NASDAQ: CDNA), a transplant diagnostics business. Mitchell said AI was helping the company improve reimbursement from private health insurers, illustrating his broader point that some of AI's biggest beneficiaries may ultimately be companies using the technology rather than building it.

“What you need to think about is who are the beneficiaries of AI that people aren’t thinking about?”

He likened it to the railway boom of the 19th century: the biggest winners weren't necessarily those building the infrastructure, but the businesses able to exploit what that infrastructure made possible. 

Two AI picks that have already delivered

That philosophy has already produced winners. Mitchell's best-performing global stock over the preceding 12 months was Silicon Motion Technology (NASDAQ: SIMO), which produces controllers that manage the flow of data between memory and processors.

Micron's withdrawal from part of the market helped Silicon Motion increase its market share from around 15% to 50-60%, Mitchell said. At the same time, its AI controller business grew from effectively zero to US$100 million in revenue in a year, with Ophir believing it could eventually reach US$1 billion.

Crucially, Mitchell doesn't attribute the share-price performance simply to AI exuberance.

“This has gone up not because of semiconductor euphoria, it’s gone up because of earnings and market share and where they operate.”

Ophir still owned the company, Mitchell said, with the shares trading at around 16 times earnings and the manager expecting further earnings upgrades. 

For Antipodes, one standout was Japanese semiconductor equipment company Kokusai Electric (TSE: 6525), which Ross said holds around 65% of the atomic layer deposition market, a critical process in advanced semiconductor manufacturing. 

Ross said earnings had risen around 50%, while the stock's valuation re-rated from the low teens to around 30 times earnings as investors began appreciating its competitive position.

The opportunities hiding outside AI

Perhaps the more interesting part of the discussion was what happens when you escape AI's gravitational pull altogether.

Ross pointed to mining services, healthcare, defence, energy and businesses exposed to other capital expenditure cycles.

One relatively recent Antipodes investment is Weir Group (LSE: WEIR), the British mining technology and services business. Ross said the company provides equipment including pipes and cutting tools to miners and has significant exposure to copper producers.

The attraction is straightforward. Antipodes can gain exposure to the mining investment cycle without paying the premium attached to some miners themselves.

Another recent addition was Booking Holdings (NASDAQ: BKNG), which had been caught up in fears that generative AI would fundamentally disrupt online travel. Ross sees the opposite possibility.

Booking.com's moat, she argued, includes the enormous network of independent hotels already connected to its platform. AI assistants may change how consumers search for holidays, but that doesn't necessarily remove the need for the booking infrastructure sitting behind the transaction.

“Claude doesn’t want to suddenly go around employing thousands of people to sign up hotels onto a platform nor be the merchant of record.”

Indeed, Ross argued that new AI search interfaces could improve Booking's bargaining position by increasing competition for Google as the gateway to its platform. 

Mitchell's fresh idea was APi Group (NYSE: APG), a US provider of fire protection and safety services.

Its attraction is a combination of regulation, scale and pricing power. Fire inspections are mandatory, while APi's geographic footprint allows it to service customers with operations spread across the US.

Mitchell said the company had previously commanded a valuation above 30 times earnings, but interest-rate concerns had pushed that down to around 18 times.

“We think they’re going to grow their way through any trouble they have by using price, while volumes should remain pretty stable.”

Ophir also believes further EPS upgrades are possible. 

Ross' two stocks for the next five years

Then came the question the session was built around: which company will investors wish they owned five years from now? Ross couldn't restrict herself to one.

Her technology pick was Taiwan Semiconductor Manufacturing Company (NYSE: TSM), the world's dominant semiconductor foundry. 

Ross pointed to strong earnings growth, pricing power, high margins and continuing capital expenditure supported by demand. But the critical part of the thesis is valuation.

“If that was a business that wasn’t listed in Taiwan, it would trade at 40 times, but of course it trades at a teens multiple.”

Unlike parts of the semiconductor hardware market that Ross views as commoditised, she believes TSMC possesses “monopoly unique capabilities”.

Her second selection could hardly be more different: Brookdale Senior Living (NYSE: BKD). 

The thesis has nothing to do with AI and almost everything to do with demographics.

Ross argued the US senior housing industry remains undersupplied after years of weak investment post-COVID, even as the elderly population expands. The economics could become particularly powerful as occupancy recovers.

“As occupancy goes up and moves through that 85% threshold, that 90% threshold, the earnings could quadruple.”

For investors wanting a long-duration structural tailwind without having to predict the next development in AI, Ross believes Brookdale fits the bill. 

Mitchell's little-known stock that could be much bigger

Mitchell went much further down the market-cap spectrum.

His five-year pick is Red Violet (NASDAQ: RDVT), a roughly US$1.5-2 billion identity intelligence and analytics software company with very limited analyst coverage. 

Mitchell backs the founders' track record and believes Red Violet can continue taking market share from larger incumbents for years.

Intriguingly, it's also a business whose management appears unafraid of an economic downturn.

“They said recently to us, ‘We can’t wait for the next recession because that’s when things get really exciting for us.’”

Mitchell finished with a prediction he hopes Livewire will hold him to.

“It’s got one analyst on it. It’s a small one-and-a-half, $2 billion company. So not very big, but in five years, hopefully it’s a lot bigger.”

Five years is a long time in markets, but Ross and Mitchell's message was clear: finding the next great global investment will likely require looking beyond the stocks everyone already owns and toward businesses the market still underestimates.