If you missed out on the gains in Nvidia last year or you got burned investing in the gold rush for other artificial intelligence (AI) stocks, there’s a smarter way to play this revolutionary trend now, says David Nelson, CFA. Look to undervalued “Old Economy” companies. They are being transformed by the ability to track, collect and instantly analyze massive amounts of data. Nelson calls it “stealth AI”—industrial manufacturers of critical but unexciting products such as electrical circuits and farm equipment are boosting profitability by using AI to become more cost-efficient, enhance existing brands and push into new markets.

Three industrial stocks that are stealth AI winners now…

Parker Hannifin (PH). This Fortune 500 firm manufactures valves, filters, flanges and hose piping for aerospace, medical and automotive use. It recently landed a US military contract to install in Army ground combat vehicles AI platforms that can predict when a Parker Hannifin engine part is about to fail so parts can be shipped before they are needed. Recent share price: $431.92.

Eaton Corp. (ETN) produces electrical components and power management systems. It recently released the iQ-Cruise system for commercial trucking. It monitors traffic, vehicle loads and terrain, then optimizes the speed and acceleration of big rigs to improve fuel efficiency by as much as 15%. Recent share price: $288.78.

Deere & Co. (DE). Technology is a growth driver for the world’s leading farm-equipment manufacturer. The latest Deere herbicide spray vehicles use high-resolution cameras and machine-learning software to scan crops, targeting only the weeds. Recent share price: $362.21.

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