Bernstein has returned to its proprietary AI Displacement Risk framework in the third instalment of its "When AI threatens the moat" series, assessing how generative AI could weaken competitive advantages across 184 European small and mid-cap stocks. The study assigns a numeric risk rating from 0 to 4 to each company, reflecting how directly AI could displace revenue or margins.
The brokerage said the outcomes from the framework have been "striking and monotonic." In the one-year window it examined, companies rated 0 delivered an average return of +23%, while those rated 4 suffered an average decline of -49%. Bernstein's analysts led by Aleksander Peterc noted a pronounced inflection point between ratings 2 and 3: one-year returns shifted from +12% for rating 2 to -19% for rating 3, a difference the report describes as a performance cliff that has intensified in recent weeks.
The latest report concentrates on the high-risk subset - stocks graded 3 or 4 - with a specific focus on names that, paradoxically, have outperformed peers with comparable exposure. Bernstein characterises these names as "still trading as though AI disruption is someone else’s problem. They are, in our view, the next shoes to drop." The note highlights five companies it deems part of that cohort: Atos, Aumovio, Ocado, Quadient and TeamViewer.
- Atos (EPA:ATOS) - Bernstein flags Atos as likely to fare worse than many peers. The firm points to Atos's revenue mix skewed toward infrastructure and legacy managed services, areas where AI acts as a deflationary force, particularly in low-value-added tasks. Within the Software & IT Services grouping, the analysts rate Atos as an above-average AI displacement risk.
- Aumovio (F:AMV0n) - The report highlights the industry shift toward so-called "Software Defined Vehicles," which redirects value away from traditional Tier 1 suppliers. Bernstein says AI compounds that trend by lowering the barrier to software development, increasing the likelihood of structurally compressed margins for Aumovio's core offerings.
- Ocado (LON:OCDO) - Ocado is placed in what the analysts call the highest-risk cluster. They warn that, while the hardware components of Ocado's platform may remain harder to replicate, the SaaS elements that support its technology offer could see their protective moat eroded by AI capabilities.
- Quadient (EPA:QDT) - Quadient's Business Process Automation software sits "in the highest-risk zone" on Bernstein's AI risk matrix. The brokerage estimates that roughly 25% of Quadient's sales are exposed to AI-driven substitution, placing a substantial portion of revenue at risk.
- TeamViewer (ETR:TMV) - TeamViewer faces heightened pressure from AI in areas such as remote support and IT ticketing workflows. Bernstein emphasises that traditional, human-intensive support activities are susceptible to automation, which could materially reduce demand for those services.
The note isolates these five names because, in Bernstein's view, market pricing has not yet fully reflected the degree of AI displacement risk they face. By focusing on companies that have outperformed similarly exposed peers, the analysts are pointing to potential targets for future re-rating if AI-driven substitution accelerates in the areas identified.
Bernstein's framework and the performance differentials it surfaces underscore the uneven way in which AI exposure is being rewarded or punished by markets, according to the report. The brokerage's work indicates a sharp divergence in investor outcomes across its risk scale, and it highlights a cluster of high-risk firms that could be revalued should AI-related erosion of competitive advantages continue.