Image source: Getty Images
AI chatbots can’t tell us the best stocks to buy, but they can check to see which ones are being talked about. And as we say at The Motley Fool, considering a diverse range of insights makes us better investors.
So I asked ChatGPT to eavesdrop on what stock market analysts are talking about, and that’s given me a headstart on some ideas to check further for myself.
Business services leader
Rentokil Initial (LSE: RTO) is getting a fair bit of love, as 12 out of 18 analysts recommend it as a Buy — with only one rating it a Sell. Interestingly, it doesn’t seem to be based on any obvious short-term undervaluation.
Analyst forecasts put the shares on a price-to-earnings (P/E) ratio of 38, which might look a bit steep. And there’s a forecast dividend yield of just 2% on the cards. But those same analysts expect Rentokil’s earnings to ramp up over the next few years — growing 60% between 2024 and 2027.
In just three years, that would be quite some performance. And it could drop that P/E to 24, which looks better value for a solid growth stock.
It comes on the back of a predicted surge in the pest control business. Some are predicting 5%-6% annual global market growth. It’s all about rising wealth and a growing need for urban hygiene. Rentokil also has its fingers in a number of business services pies around the globe.
So is it really one of the best stocks to buy now? Today’s valuation is the biggest drawback for me. But it’s possibly the best in its field, and I rate it a definite long-term consideration.
IT infrastructure demand
Computercenter (LSE: CCC) is also raising investor interest. Again, it’s not much of a dividend stock with a forward yield of 2.3%. But with AI advances driving increasing demand for computer and network-related infrastructure, is a P/E of 19 too high? And what if it drops to 16 by 2027 as analysts predict?
With earnings expected to grow close to 30% in the next three years, I could see that as cheap. Especially when we see the high growth stock valuations of tech companies closer to the leading edge of AI. There’s one thing I particularly like about a company like Computacenter… whoever wins the AI wars, everyone will need the equipment, the connections, and all the rest of the infrastructure.
It is however, a very competitive business. And if any AI bubble really does burst as some fear, the fallout could cause some pain. The company also cautioned us, at Q3 time, of “the ongoing uncertain geopolitical and macroeconomic backdrop“.
But the update also spoke of “strong momentum in North America driven by continued volume growth with both enterprise and hyperscale customers“. And that could be key to long-term growth.
The potential IT demand has to make this a stock to consider buying in 2026 too.
