Generative AI accounted for $3 billion of Accenture’s new bookings in fiscal year 2024, which ended Aug. 31, 2024. Accenture CEO Julie Sweet said in the company’s fiscal Q4 update that management believes generative AI “is the most transformative technology of the next decade.”

Accenture is also a leader in enabling companies to implement industrial AI. The consulting giant is launching a virtual facility robot fleet simulation blueprint that integrates Nvidia’s Omniverse, Isaac robot development platform, and Metropolis Internet of Things platform to help manufacturers “build autonomous, robot-operated software-defined factories and facilities.”

At first glance, Accenture’s valuation might seem problematic. The stock trades at 28 times forward earnings. Its price-to-earnings-to-growth (PEG) ratio, which is based on five-year growth projections, is a relatively high 2.24.

However, Accenture’s opportunities in AI could be larger than these valuation metrics imply. Don’t underestimate the help organizations will likely require in implementing enterprise AI and industrial AI. Accenture’s strong partnership with Nvidia could give it a significant competitive advantage over the next few years.

I think Huang is correct about the importance of enterprise AI (especially the use of AI agents) and industrial AI. I also believe he’s right about Accenture’s role in helping bring these technologies to organizations across the world. Accenture could be an ideal picks-and-shovels stock to buy for investors seeking to profit from what Huang views as the next wave of AI.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet. The Motley Fool has positions in and recommends Accenture Plc, Alphabet, and Nvidia. The Motley Fool recommends the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool has a disclosure policy.

Nvidia CEO Jensen Huang Says This Is the “Next Wave of AI” — and He Singled Out 1 Potential Big Winner Other Than Nvidia was originally published by The Motley Fool