Wall Street Loves AI Hype, but Less Than 1 in 10 Businesses Use It. Here's Who's Winning Anyway.

Key Points

• AI is a popular investing trend despite the fact that its use is not widespread throughout the business world.

• San Diego and Boston are the cities where AI usage is most prevalent.

• The information sector is the leading the way in AI adoption.

• 10 stocks we like better than Nvidia ›

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There's no denying that Wall Street analysts remain bullish about artificial intelligence (AI) stocks -- even in light of some of the massive gains they've already made. Main Street investors have also been incredibly ebullient about the prospects of stocks that have varying levels of AI exposure.

But the optimism that analysts and retail investors share belies the fact that many businesses are still not incorporating AI solutions into their operations, according to the latest research from The Motley Fool. Beguiling as this may be, AI is still growing in popularity in certain regions and organizations.

Image source: Getty Images.

AI and the city

Far from ubiquitous, the adoption of AI varies greatly throughout the United States. There are some areas that stand out, though. Southern California, for example, is one of the hotbeds for AI activity. Leading the nation, the San Diego metropolitan area currently boasts a 16% usage rate, and it's expected to rise to about 20%.

The popularity of AI in the San Diego metropolitan area stems from the multitude of AI start-ups located there. For example, Shield AI is an aerospace and defense company that is developing an autonomous pilot in collaboration with Kratos Defense and Security.

Unsurprisingly, the Boston metropolitan area -- home to prestigious academic institutions like Harvard and the Massachusetts Institute of Technology -- is another significant source of AI activity. Whether it's a reflection of graduates from Harvard and MIT staying in the area or the faculty from these institutions, many AI start-ups are calling the city home. Boston Dynamics, for instance, is a leader in AI and autonomous robots, and it traces its history back to MIT.

AI in the workplace

Currently, only 9.2% of businesses are incorporating AI solutions. Although this may seem low, it's a noticeable gain over the 3.7% adoption rate the U.S. Census Bureau identified when it first started collecting data in the fall of 2023. The spread of this technology doesn't show signs of slowing down either -- it's projected that in six months, 11.6% of businesses will be using AI.

Consistent with its growing popularity among individuals in and out of the workplace, the information sector, which includes tech and data companies, is the leading source of AI adoption in business with a 24.2% usage rate. For example, ChatGPT, now a household name, has emerged as a prime tool for sourcing information much the same way that Alphabet's Google developed into the leading internet search engine.

The sector is packed with some of the most recognizable, established providers of AI tools. From Microsoft Copilot and Alphabet's Gemini to IBM's Watson AI and Apple's Siri, the information sector is a who's who of AI innovators. Of course, so many of the capabilities that companies can provide in generative AI, along with other AI functionality, are made possible by Nvidia (NASDAQ: NVDA), which designs industry-leading graphics processing units (GPUs).

That's not to say that other sectors aren't embracing AI. Featuring a 21.4% usage rate, the mining sector is also a notable proponent. One of the largest mining companies by market capitalization, Rio Tinto Group, has incorporated AI into various aspects of the company's operations, including autonomous haulage systems and creating 3D subsurface maps to improve exploration of mineral deposits.

If you've bought or sold a home recently, you've likely noticed how common AI is in the real estate industry too, where AI has a 17.4% usage rate. Zillow Group and Redfin rely on the technology to assist in producing property value estimates, while Nvidia provides the ability to produce digital twins, enabling virtual tours with its Omniverse technology.

As it becomes increasingly well-known how businesses are leveraging the power of AI, non-adopters will surely begin to incorporate the technology in greater numbers.

Should investors eschew AI stocks due to their relatively low adoption rates in business?

While it may be some time before AI is truly widespread across industries, investors should not take this data as a cue that now is a poor time to invest in AI stocks. The early stages of a major technological shift tend to also be an optimal time for growth investors to build their exposure to stocks in the space.

For an all-in-one AI stock, investors will want to strongly consider Nvidia. Its dominant position in the AI landscape has made it the world's most valuable company, and it has the launch of new GPUs featuring its Blackwell Ultra architecture representing just one near-term catalyst. There is plenty of growth potential on the horizon too.

And that's not to say that more conservative investors should avoid AI stocks, either. If managing risk and diversification are top concerns, they can consider an AI-focused ETF as yet another way to prosper from the burgeoning industry.

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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, International Business Machines, Microsoft, Nvidia, and Zillow Group. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.