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The AI revolution can send these 2 stocks higher
Working the stock market is a crapshoot. Getting the best information in a timely manner and knowing how to use it are the keys to success. So, here are some numbers to think about. According to industry market research, companies and artificial intelligence products are on the verge of explosive growth. The AI market was valued at $ 9.5 billion in 2018, more than $ 27 billion in 2019, and is projected to exceed $ 250 billion in 2027. AI refers to the use of data to simulate human intelligence processes , including machine learning, reasoning and self-correction. AI is entering almost every sector. Data collection and grouping, factory automation systems to self-driving cars and even online shopping sites – all benefit from AI applications. And that was not ignored by Wall Street. Analysts say that many attractive investments can be found in this space. With that in mind, we opened the TipRanks database to find two AI stocks that obtained the seal of approval from 5-star analysts, stock professionals ranked among the top 3% of their peers. Let’s find out why they recommend these two AI moves. Veritone, Inc. (VERI) The first AI stock we are looking at is Veritone, a software company whose flagship product, an AI-based operating system called aiWARE, allows the user to coordinate machine learning models and integrate data sources. disparate – including audio and visual – actionable intelligence results. The system has an open architecture and has been applied in the entertainment, government, legal and media sectors. In early March, Veritone released its 4Q20 results, showing record quarterly revenue of US $ 16.8 million – a 35% gain over the previous year. The increase was driven by annual gains in sales of aiWARE SaaS, which rose 53%, and Advertising, which rose 50%. However, Veritone’s shares fell 49% from the peak value reached in February. Investors liked solid finances, but there is some concern about the company’s future direction. Management is forecasting a non-GAAP net loss in the range of $ 3.9 million to $ 4.4 million in 1Q21 and, although this represents a 38% improvement in mid-1Q20, investors want to see a profit. Roth Capital 5-star analyst Darren Aftahi, however, believes that this new lower share price could offer new investors an opportunity to enter VERI at a low cost. Aftahi sees this as a well-placed AI growth story. “VERI had better results in the 4Q, but, more importantly, accelerating the growth of revenue in AI SaaS and Advertising (both above 50%). If our assumption about your content and licensing business returns to 2019 levels (with modest growth) is correct in 2021, it implies that your 2021 guide (which was much better, by the way) for advertising and AI SaaS is north of 40% growth (~ 30% for advertising and ~ 60% for AI). Most importantly, its AI SaaS line was geared to 60-65% growth, showing a doubling of growth year on year, ”noted Aftahi. In line with his comments, Aftahi classifies the stock as Buy, and its target price of $ 50 implies a 104% growth next year. (To view Aftahi’s history, click here) Altogether, with a share price of $ 24.53 and a consensual average price of $ 38.75, VERI shares offer investors a chance of 58% growth in this year. The analyst’s consensus rating, a moderate buy, is based on 3 buy and 1 sell ratings. (See VERI’s stock analysis at TipRanks) Verint Systems (VRNT) Verint’s shares have appreciated 107% in the last 12 months, with much of that gain reaching a 31% jump in early February. This leap came in reaction to the company’s division into two entities – Cognyte, the spin-off, took over the parent company’s cyber and intelligence operations, while Verint continued as a pure-play AI-based customer engagement service. The company uses its combination of market experience and analytical and AI products to enable customers to optimize their automation, knowledge and workforce. Verint’s 2021 fiscal year ended on January 31, the day before the division, and the company released its fourth quarter and full-year results in late March. These results exceeded expectations for the quarter, with $ 349 million in total revenue – a 3% year-over-year gain. For the entire year, however, revenue of $ 1.27 billion was just below the $ 1.3 billion reported in the previous year. Fourth-quarter data bodes well for Verint in its pure incarnation of customer engagement, as the AI cloud sectors grew by more than 30% year-over-year in that quarter. Calling Verint a “unique AI engagement company”, Oppenheimer’s 5-star analyst Timothy Horan sees the new Verint in a strong position to move forward. “VRNT reported solid profits in 4Q21 and is now a pure AI company for customer engagement after its separation. VRNT is successfully transitioning to a SaaS / Cloud model. New perpetual license (PLE) reserves increased by 15% this quarter. The transition from licensed sales is difficult, but it is far behind, as revenue growth is expected to accelerate from this quarter. Demand for the cloud saw a healthy 50/50 split between existing and new customers … ”Arriving at the end result, Horan adds:“ The year came out with a strong boost in the cloud and in reserves. We think you can continue to sign big deals in the cloud in contact centers and other sectors. These are optimistic comments, and Horan supports them with an Outperform rating (ie Buy) and a target price of $ 60 indicating room for ~ 32% growth in the next 12 months. (To view Horan’s track record, click here) In general, there is broad agreement on Wall Street that Verint is a stock to be bought, as demonstrated by Strong Buy’s unanimous analyst consensus rating. This is based on 6 recent positive reviews. The shares have an average price target of $ 59.33, suggesting a potential increase of ~ 30% from the current trading price of $ 45.50. (See TipRanks VRNT stock analysis) To find good ideas for trading AI stocks with attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock insights. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.