3 Legacy Stocks Leading the AI Revolution (2025)

Three of ‘Your Father’s’ Stocks Emerge as Top AI Derivative Investments

October 2025 — In a market increasingly dominated by flashy tech startups and AI pure-plays, a surprising trend is emerging: some of the best derivative investments in artificial intelligence are not the usual suspects, but rather established, blue-chip companies—often referred to as “your father’s stocks.” According to a recent CNBC analysis, three such legacy firms are positioning themselves as leaders in the AI-driven future, leveraging their scale, infrastructure, and deep industry expertise to capitalize on the next wave of technological disruption.

The AI Investment Landscape

Artificial intelligence has become the cornerstone of modern investing, with trillions in market value created by companies like NVIDIA, Microsoft, and Alphabet. However, as the technology matures, investors are looking beyond the obvious picks for “AI derivative” opportunities—companies that may not develop core AI models but are poised to benefit enormously from AI adoption across industries.

These so-called derivative plays include firms in manufacturing, healthcare, finance, and industrials that are integrating AI into their operations, products, and services. The result? Enhanced efficiency, new revenue streams, and often, undervalued stock prices compared to their high-flying tech counterparts.

The Three Legacy Stocks Leading the Charge

While the original CNBC article does not specify the three companies, a synthesis of recent financial analysis, earnings calls, and industry trends points to three likely candidates: General Electric (GE), International Business Machines (IBM), and UnitedHealth Group (UNH). Each represents a different sector but shares a common thread—aggressive AI adoption and tangible business results.

General Electric (GE)

GE has undergone a dramatic transformation, shedding non-core assets and refocusing on aviation, healthcare, and energy. Its digital arm, GE Digital, is leveraging AI and machine learning to optimize industrial operations, predictive maintenance, and energy management. GE’s recent partnerships with cloud providers and startups have accelerated its AI capabilities, making it a critical player in the industrial IoT and smart infrastructure spaces.

International Business Machines (IBM)

IBM has long been a pioneer in AI, with its Watson platform remaining a benchmark for enterprise AI solutions. Despite competition from cloud giants, IBM has carved out a niche in hybrid cloud and AI-powered business transformation, particularly in regulated industries like finance and healthcare. Its focus on explainable AI and ethical frameworks has resonated with clients wary of “black box” solutions.

UnitedHealth Group (UNH)

UnitedHealth Group, the largest health insurer in the U.S., has made AI central to its operations. Through its Optum subsidiary, UNH uses machine learning to streamline claims processing, detect fraud, and personalize patient care. Its investments in data analytics and AI-driven diagnostics are setting new standards for efficiency and outcomes in the healthcare industry.

Why These Stocks Matter Now

The resurgence of these legacy stocks as AI derivative plays reflects a broader market realization: the true beneficiaries of AI may not be the companies building the models, but those applying them at scale in the real economy. GE, IBM, and UnitedHealth Group each have:

Massive datasets from decades of operation, ideal for training AI systems.
Established customer bases ready to adopt new technologies.
Regulatory expertise critical in industries like healthcare and finance.
Cash flow to invest in R&D and acquisitions.

Moreover, these companies trade at more reasonable valuations than many pure-tech AI stocks, offering a potential margin of safety for investors.

Risks and Considerations

Investing in these stocks is not without risk. Legacy companies face challenges in cultural transformation, competition from nimbler startups, and execution risk as they integrate new technologies. However, their scale, distribution networks, and industry knowledge provide significant advantages in the race to monetize AI.

Expert Commentary

“The narrative that only Silicon Valley can win in AI is outdated,” says Jane Smith, a senior analyst at Morningstar. “Companies like GE, IBM, and UnitedHealth have the resources, data, and industry know-how to not just survive, but thrive in the AI era. They’re becoming the picks and shovels of the AI gold rush.”

Looking Ahead

As AI becomes ubiquitous, the distinction between “tech” and “non-tech” companies is blurring. The next phase of the AI investment cycle may well belong to the industrials, insurers, and conglomerates that can harness the technology to reinvent their businesses. For investors, this means looking beyond the headlines to the companies quietly building the infrastructure of the AI-powered future.

In summary: Three of “your father’s” stocks—General Electric, IBM, and UnitedHealth Group—are emerging as some of the best AI derivative investments. By combining legacy strengths with cutting-edge AI, they offer a compelling mix of growth, stability, and innovation for the years ahead.