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AI growth: 2 stocks with ‘strong buy’ that benefit
The COVID pandemic may be declining, but it has left its mark on various aspects of our lives. From mask mandates to travel restrictions, we’re looking at some of the changes – but in the business world, the use of artificial intelligence (AI) has expanded dramatically in recent years. This was probably unavoidable – but AI brought benefits in dealing with the pandemic for companies that could take advantage of it, and accelerated the expansion. AI has found its place in a wide variety of applications, at the forefront and back end of businesses. It is common in software management and data systems, as well as in communications, where AI systems filter emails and run robochats. And it’s not ignored by Wall Street. Analysts believe that there are many compelling investments within this space. With that in mind, we opened TipRanks’ database and drew two stocks that benefit from AI technology. It is important that both received enough positive calls from analysts to get consensus ratings for ‘Strong Buy’. Nuance Communications (NUAN) We start with Nuance, a company in the niche for communications software. This Massachusetts company provides solutions for business clients in the healthcare and customer service industry, with products that enhance speech recognition, telephone call control systems, automated telephone directory, medical transcription, and optical character recognition. It is a complete range of AI-powered, cloud communication software, applied in real time. Nuance’s flagship product, the Dragon Ambient eXperience (DAX), is marketed to the healthcare industry, where it uses AI to automate the burden of doctor practices and hospitals. These streamlined surgeries allow physicians to spend more time and resources on patients, and provide greater satisfaction to healthcare providers and users. The applications of Nuance’s product and solution lines in the current environment are clear: when the pandemic shut down so many people at home, businesses still had to maintain their customer-focused systems, and software automation, based on AI technology, made it possible with fewer staff . Since the pandemic began last winter, the company has grown its shares tremendously, by 205% higher in the last twelve months, far exceeding the total stock market. The most recent quarterly report for the first quarter of the fiscal year ended $ 81.4 million above forecast. The profit, as expected, showed a net loss, but at 27 cents the loss was a successive improvement of 28% from the third quarter. The company’s balance sheet is strong, with no debt, $ 256 million in cash on hand and a credit facility of up to $ 50 million. The company’s latest quarterly report for the first quarter of the fiscal beats the forecasts on the top and bottom line. Earnings weakened expectations by 11% to 20 cents a share, while revenue of $ 345.8 million was a modest 2% above the estimate. As a result, year-on-year operating cash flow grew by 22% to $ 54.6 million for the quarter. Among the bulls is 5-star analyst Daniel Ives, of Wedbush, who rated NUAN shares a better performance (ie buy), and his $ 65 price target implies an upward potential of ~ 44%. “To see here how Ives ‘plays off more hospital-wide deployments to the cloud and gains further momentum based on our checks,’ Ives said. The analyst added:” From a valuation / SOTP perspective, we believe the DAX enterprise can eventually be worth between $ 3 billion and $ 4 billion for NUAN’s inventory, as this next-generation platform is a potential paradigm changer for hospitals / healthcare clinics / specialists over the coming years. ‘Ives is no outlier on Nuance does not, as evidenced by the unanimous consensus of Strong Buy analysts on the stock. Nuance has received 6 recent reviews, and everyone should buy. up 32%. (See NUAN stock analysis on TipRanks) Dynatrace, Inc. (DT) The second AI stock we’ll look at, Dynatrace, is another cloud software company – but Dynatrace’s products are designed to present operating data. company’s AI platform provides intelligent automation for network management and cloud monitoring. DT’s platform provides for cloud automation, business analysis, digital experience, application security, applications and microservices, and infrastructure monitoring. It is sold as a one-stop-shop for network and system administrators looking for an intelligent software agent. Dynatrace’s shares show steady growth over the long term. The stock has risen 133% over the past twelve months, and revenue has also grown during the period. In the most recent report, for the third quarter of fiscal year 2021, the company showed $ 182.9 million in top revenue, beating the forecast by ~ 6% and growing 27% year-on-year. The EPS rose 6 cents, equal to the second quarter and much better than the break-even point for the previous quarter. Three important criteria stand out in the quarterly report, and both for the right reasons. Subscription revenue increased 33% year-on-year, to $ 170.3 million, and the annual recurring revenue (ARR) – which is a key predictor of future performance – increased by 35% per year and on Increased by $ 722 million. At the same time, license revenue dropped by more than 93% to just $ 300,000. Taken together, these results point to a strong shift towards recurring cloud customers – a general trend in the software space. Jack Andrews, a 5-star analyst at Needham, has been following Dynatrace closely, and he believes DT’s AI products could replace current tools as customers expand into additional modules. “Built-in AIOps and automation create a compelling value proposition … Compared to competitors in the market, DT’s AI engine is embedded in its core platform and can be used in the portfolio to deliver answers from data. On top of that, the One Agent technology automatically detects application data and can therefore map the billions of dependencies in complex environments, “said Andrews. The analyst concluded: ‘We believe DT is well positioned to serve as a single person. a source of truth that can help users find a line between written code and business results (ie BizDevSecOps). “Andrews cites Dynatrace as a top choice, and in line with this optimistic rating, the analyst rates the stock a buy with a price of $ 66 Investors have a profit of ~ 28% on their pocket if the analyst’s dissertation were to play (to see Andrews ‘record, click here.) Once again we look at’ a stock that unanimously inspired strong performance by Wall Street analysts. The DT shares have 13 Buy reviews for a strong Buy consensus rating. The stock is selling for $ 51.76 and the average price target of $ 59.69 indicates an increase of about 15% from that level. (See DT stock analysis on TipRanks) To find great ideas for trading AI stocks. at draw draws, visit TipRanks ‘best-selling stocks, a newly launched tool that unites all of TipRanks’ insights. Disclaimer: The opinions expressed in this article are solely those of the proposed analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.