The AI revolution could send these two stocks higher
Working on the stock exchange is a data game. Getting the best information in a timely manner and knowing how to use it is the key to success. Here are some numbers to think about. According to industry market research, artificial intelligence companies and products are on the verge of explosive growth. The AI market was valued at $ 9.5 billion in 2018, over $ 27 billion in 2019, and is expected to exceed $ 250 billion in 2027. AI refers to the use of data to simulate human intelligence processes, including learning, thinking, and self-correcting by machines. AI is finding its way into almost all industries. Data acquisition and logging, automation systems from factories to self-driving cars to online shopping sites – all benefit from AI applications. And this was not ignored by Wall Street. Analysts say there are many compelling investments in this area. With that in mind, we opened TipRanks’ database to find two AI stocks that have received the seal of approval from 5-star analysts. The stock professionals are among the top 3% of their competitors. Let’s find out why they recommend these two AI games. Veritone, Inc. (VERI) The first AI stock we look at is Veritone, a software company whose flagship product, an AI-based operating system called aiWARE, enables users to coordinate machine learning models and integrate disparate data sources – including audio and video – into actionable intelligence outcomes. The system has an open architecture and has been used in entertainment, government, law and media. In early March, Veritone released its fourth quarter 20 earnings and posted record revenue of $ 16.8 million per quarter – up 35% year over year. The increase was due to year-on-year sales growth at aiWARE SaaS (53%) and Advertising (50%). However, Veritone stock was down 49% from its February high. Investors liked the strong financial data, but there are some concerns about the company’s future guidance. Management predicts a non-GAAP net loss for the first quarter of 21 in the range of $ 3.9 million to $ 4.4 million. While that represents a 38% improvement by mid-Q1 20, investors are looking to make a profit. However, Roth Capital 5-star analyst Darren Aftahi believes this new, lower share price could offer new investors an opportunity to get into VERI cheaply. Aftahi sees this stock as a well-positioned AI growth story. “VERI had better results in the fourth quarter, but most importantly, it accelerated revenue growth in both AI SaaS and Advertising (both over 50%). If our assumption that the content and licensing business will return to 2019 levels (with slight growth) is correct in 2021, it implies the 2021 guide (which, by the way, was much better) for advertising, and AI SaaS is north of 40% growth (~ 30% for advertising and ~ low 60% for AI). Most importantly, the AI SaaS line was targeted for 60-65% growth, which shows that growth has doubled year over year, ”noted Aftahi. Consistent with his comments, Aftahi rates the stock at a buy and its target price of $ 50 implies 104% growth over the coming year. (To see Aftahi’s track record, click here.) Overall, with a share price of $ 24.53 and a consensus average target price of $ 38.75, VERI shares offer investors an opportunity for stock growth of 58% this year. The analyst consensus rating, a moderate buy, is based on 3 buy ratings and 1 sell. (See VERI stock analysis on TipRanks) Verint Systems (VRNT) Verint stock is up 107% over the past 12 months, with a large portion of that gain posting a 31% jump in early February. That jump was in response to the company’s split into two: Cognyte, the spin-off, took over the parents’ intelligence and cyber operations, while Verint continued as a pure, AI-powered loyalty service. The company leverages its combination of market experience and AI and analytics products to enable customers to optimize their automation, knowledge and workforce. Verint’s 2021 fiscal year ended January 31, the day before the split, and the company announced its fourth quarter and full year results in late March. These results exceeded expectations for the total revenue of $ 349 million for the quarter, up 3% year over year. For the full year, however, sales of 1.27 billion US dollars were slightly below the 1.3 billion US dollars of the previous year. The Q4 data is a sign of the Verint in its sheer customer loyalty incarnation, as those AI cloud sectors grew more than 30% year over year this quarter. Oppenheimer’s 5-star analyst Timothy Horan calls Verint a “unique AI engagement company” and sees the new Verint in a strong position to move forward. “VRNT reported solid results for the fourth quarter of 21 and is now a pure AI customer loyalty company after its split. VRNT is successfully making the transition to a SaaS / cloud model. The number of new perpetual license bookings (PLE) increased 15% this quarter. Transitioning from licensed sales is difficult, but largely behind, as revenue growth should accelerate from this quarter onwards. The cloud demand was split 50/50 between existing and new customers. “Horan adds:” The year ended with a strong dynamic in clouds and bookings. We believe it can continue to sign large cloud deals across contact centers and other industries. “These are bullish comments and Horan backs them with an Outperform (i.e. Buy) rating and a price target of $ 60, which indicates ~ 32% growth is possible over the next 12 months. (To see Horan’s track record, click here.) Overall, there is broad consensus on Wall Street that Verint is a stock to buy, as the unanimous consensus rating from Strong Buy analysts shows. This is based on 6 recent positive reviews. The stock has an average target price of $ 59.33, which indicates an upside potential of ~ 30% from the current trading price of $ 45.50. (See VRNT stock analysis on TipRanks.) To find great ideas for trading AI stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy,’ a newly launched tool that brings together all of the insights into TipRanks stocks. Disclaimer: The opinions expressed in this article are solely those of the presented analysts. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.
Comments are closed.