You can’t really hide from AI anymore. Even if you don’t deal with it professionally, chances are AI has enhanced your use of search engines, or at least you’ve messed around with chatbots like ChatGPT. AI is also behind the targeted ads you see on social media and Google. Track our internet and social media usage and select advertising accordingly.
What this means for the future of computing, statistics, data analysis, marketing and advertising has not yet received enough focus. But one thing is certain: AI presents a wide range of companies with an opportunity to ride the wave. Everything from digital advertisers to his IoT will be affected by the AI boom, but smart investors can embrace and capitalize on it.
While this may not be as easy as it seems, there are avenues for investors to enter the world of AI. First, realize that not all companies and stocks out there are directly related to artificial intelligence. Companies can benefit from leveraging new technologies without having to deal directly with them or write the software behind them. Second, you don’t necessarily have to look for big tech companies. There are many AI-related companies out there that have yet to “grow fast.” In the future, there may be more room for stock prices to rise.
Needham analysts have followed that strategy and identified stocks that could benefit from AI, but have not fully priced it in. We pulled the details for two of her AI-adjacent stocks from her TipRanks database, which Needham analysts have a wealth of. Room to Run – Up 40% or more. Here are the details:
Serence Co., Ltd. (CRNC)
The first stock to look at is Cerence. The company has continued to innovate over his 20 years and is now a software company focused directly on artificial intelligence. Specifically, the company is developing an AI-powered platform that powers new tools in mobility. Cerence’s product aims to provide the driver with voice-activated AI assistance for her. AI tools use generative learning to predict driver preferences, link to the car’s sensors and engine systems to make driving easier and safer, or connect to the car’s environment and entertainment systems to help the driver navigate the road. You can also focus on
This is not self-driving. Rather, it’s about building smarter cars that can work with drivers. Cerence’s technology is already in more than 475 million of his vehicles in production today, and the company partners with more than 80 of his OEM and Tier-1 automotive companies. Its partners include big names such as Subaru and Suzuki, GM and Ford, Mercedes and Renault.
In terms of financial performance, in its recent second quarter 2023 report (March quarter), Cerence’s sales were $68.4 million, down 21% year over year but nearly $2.5 million above expectations. rice field. As a result, Cerence’s earnings were 9 cents per share higher than expected, with a non-GAAP EPS loss for him of 4 cents per share.
A closer look at the results reveals that Cerence saw a significant increase in bookings in the first half of fiscal year 2023, reaching $263 million in total bookings at the end of the second quarter. This represents an 11% increase over the previous year. The company is forecasting third-quarter revenue of $58 million to $62 million, raising the lower end of its full-year earnings outlook. New guidance for fiscal 2023 projects total revenue to range from $280 million to $290 million.
The stock caught the eye of Needham’s Rajvindra Gill, who Selence said was “our favorite small-cap to play with AI.”
“The company is developing next-generation voice-assisted products based on in-house deep learning IP combined with state-of-the-art generative AI,” continued the five-star analyst. “We are increasingly positive on the story following the company’s recent results, which have narrowed our outlook for 2023 upwards. We see 2024 as a year of strong growth.”
Gill therefore rates these stocks as Buy and his price target of $42 suggests a 47% upside potential over the year. (To see Gil’s achievements, click here. )
The company has picked 5 recent analyst reviews, 3 holds and 2 buys, with a consensus rating of “moderate buy”. With an average target price of $32 and a current trading price of $28.52, over a one-year period, Cerence has 12% upside. (See Cerence stock forecast.)
Etsy (ETSY)
The second stock we’re looking at, Etsy, isn’t an AI stock per se. Rather, Etsy is a company with great potential to benefit from applying AI technology to its current model. Etsy is an online e-commerce company that provides a platform that connects buyers and sellers in a global marketplace. The company’s platform is particularly popular with hobbyists, artists and craft suppliers who use the platform to set up independent stores and specialize in handmade, vintage and other niche items. is often
So this is not an AI stock. But Etsy can use AI just like sellers on its platform. The latter recently experimented with selling AI products, an interesting endeavor but a sideshow compared to the company’s use of artificial intelligence. Etsy touts itself as “keeping commerce human,” but it doesn’t shy away from using AI as a tool.
Simply put, Etsy has over 100 million unique items listed on the site and connected over 7 million sellers with over 95 million buyers last year. This alone is too much for a single search. However, Etsy uses generative AI in its in-platform search engine to provide more sophisticated searches and better results for both buyers and sellers. Powered by machine learning, AI Search can better understand the highly individual and unique items commonly found on Etsy and the idiosyncratic searches required to find them.
Not surprisingly, as an e-commerce company, we believe Etsy will deliver its best quarterly performance in Q4. But the company’s recently reported first quarter was good news for investors. On the top line, Etsy reported his earnings of $640.78 million. That’s an increase of more than 10% year-over-year, beating his expectations by $19.95 million. The company’s net income was $74.5 million, down 13% from a year ago, but EPS was 53 cents per share, 3 cents higher than expected.
Analyst Anna Andreeva looks to Etsy instead of Needham, and sees ETSY as “top of the list of beneficiaries” from generative AI. Elaborating on the matter, she further said: “Since most of ETSY’s searches are unstructured (the company uses multiple technologies simultaneously), generative AI is used to search (the ability to sort and filter results from Etsy’s 100+ million listings) and Seen as a great opportunity to improve search “frequency”; management sees this as another tool in their toolkit (not necessarily replacing what is currently in use). So far, ETSY has two squads of his (about 20 people, some new hires, some redeployed) working with Github’s co-pilot, and he’s been methodical towards the occasion. It is working. Frequency and subsequent his AOV (“cushion to couch” effort) are considered the greatest AI applications. ”
In line with her comments, Andreeva gave Etsy stock a Buy rating, priced at $160, indicating an astounding 97% upside potential next year. (To see Andreeva’s achievements, click here. )
A recent 18 analyst review on Etsy had a wide range of opinions, with 12 buys, 5 holds and 1 sell as the consensus “moderate buy”. At $81.05, the average target price of $125.76 means a 55% gain over the course of the year. (See Etsy’s Stock Prediction.)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. Content is used for informational purposes only. It is very important to do your own analysis before making any investment.
