Artificial intelligence has become the new “shiny thing” that attracts investors’ attention. The eruption began last November when OpenAI’s ChatGPT appeared, showing in the clearest way possible how artificial intelligence can change the ways computers use the data it collects and the ways we interact with it.
The sudden interest in artificial intelligence has had a ripple effect. Investors are looking for companies with greater exposure to AI, while tech companies are keen to publicize their AI tie-ups and offerings.
JPMorgan analyst Alexei Gogolev is watching these developments closely. Recently, he said, “Since Chat GPT came into the public domain, many companies have rushed to highlight their AI expertise, hailing themselves as winners in the field of AI. We have consulted a number of companies in our coverage, technology leaders, and reviewed various public information In order to analyze who are the real beneficiaries and leaders in this ecosystem.”
Gogolev continues to make specific recommendations, suggesting which technology stocks have the potential to see strong gains from the AI revolution. using TipRanks databaseWe researched a couple of his picks to see what makes them stand out.
Quantitative technique (ALKT)
We’ll start with Alkami Technology, a company that provides cloud-based digital banking solutions to the US financial market. Alkami has been in operation since 2009, and its products allow banks and other institutions to increase their return on investment through an enhanced digital banking experience for customers. The cloud-based platform provides enterprise customers with tools to improve user experience, manage large-scale data, and benefit from continuous delivery of software updates.
The company’s tools and products are adaptable to a wide range of banking needs, from retail banking to business and commercial financial products. Data and management solutions include customer insights, marketing automation, data cleansing and AI-based predictive marketing. Alkami’s ability to manage data at scale is a prerequisite for the effective use of AI; Machine learning systems use a “brute force” approach, which relies on artificial intelligence to analyze huge amounts of data.
Earlier this month, Alkami launched its first product specifically designed to combine data resources with AI capabilities. The Engagement AI model, an industry first, uses artificial intelligence and machine learning, along with Alkami’s proprietary key lifestyle indicators, to identify customer behaviors most likely to lead to account retention – a critical capability for banks seeking to increase holders. Accounts dealing with products and services.
This product announcement came shortly after Alkami reported its financial results for the second quarter of ’23. The company has demonstrated a recent trend of increasing quarterly revenue and mitigating quarterly earnings losses – and this year’s second quarter saw a continuation of both of these trends. Alkami reported revenue of $65.8 million, posting a 30% year-over-year increase and beating estimates by $2.65 million. In terms of bottom line, the company’s non-GAAP EPS loss was 3 cents, beating expectations by 2 cents.
Alkami’s customer metrics supported the increasing revenue and profit trends. The company closed the second quarter with 40 new customers and reported that 15.8 million users were using its digital banking platform.
Alexei Gogolev of JPMorgan was impressed with Alkami’s use of AI in its operations and products, stating, “Alkami’s transparency and improved use of AI positions it well among the analyzed coverage group. We believe Alkami successfully uses AI both internally and externally to create effective and exciting solutions.” Alkami’s business model provides regional banks and credit unions with high-tech banking solutions.The company integrates AI to personalize user experience, provides automated data analytics (more than 20 products with AI integration), publishes white papers, case studies, data insights, and digital banking blogs to educate consumers.. .”
“Alkami is ranked among the leading players in our financial services coverage due to the diversity of its solutions (including fraud protection, customer chatbots, etc.),” the analyst concluded.
As measured by its stance, Gogolev rates ALKT Overweight (i.e. Buy), with a price target of $19 to indicate a 25% upside for one year. (To watch Gogolev’s record, click here)
Overall, there are 7 recent analyst reviews on record for ALKT stock and they’ve been broken down into 6 Buys and 1 Hold, for a Strong Buy consensus view. The stock is selling for $15.16, and its average price target of $21 indicates a potential upside of approximately 38% in the next 12 months. (be seen ALKT stock forecast)
Procor Technologies (PCOR)
The next stock under JPMorgan’s radar is Procore, a company leveraging technology and cutting-edge software systems to transform the construction industry. Procore offers a comprehensive suite of collaboration tools through its cloud-based construction management software platform, enabling seamless integration and coordination between builders, contractors, project managers and property owners – the primary stakeholders in any construction project. The platform enables them to use connected devices such as smartphones and tablets to share documents, site plans and projects, as well as critical data.
The Procore software platform includes various features, such as document storage, markup, and meeting minutes – essential components of any project. By providing digital access to these components in real time, Procore simplifies construction projects of all sizes.
With its sights set on a lucrative market, Procore targets the global construction industry, which has a combined value of more than $14 trillion. The industry loses more than $500 billion annually due to inefficient rework and communication. Procore estimates that by addressing these issues, construction stakeholders could achieve $1.6 trillion in productivity gains. Currently, the company reports that more than a million construction projects around the world, totaling over $1 trillion, have used its platform.
Using artificial intelligence, Procore has developed “Building Intelligence” – AI-guided workflows based on rigorous data analysis, driving insights and precision decision making. The data of every construction project is centralized within the Procore platform, allowing clients to leverage AI-powered analytical tools to comprehensively understand historical data and formulate effective KPIs for optimal efficiency. Procore boasts that its clients save, on average, 15 days on each project and achieve a 16% reduction in rework.
Procore released its results for the second quarter of ’23 at the beginning of this month, showing increased revenue and earnings in another quarter. After going from a net loss to a net profit in the first quarter, the company continued its good performance in the second quarter. Non-GAAP earnings per share doubled from 1 percent per share to 2 cents, while beating expectations by 11 cents. Furthermore, the company’s revenue totaled $228.5 million, beating estimates by over $10.52 million, posting a 33% year-over-year increase.
Strong performance and smart use of artificial intelligence led JPMorgan’s Gogolev to rate this stock highly in his notes. The analyst says: “Construction needs to be digitized, and AI early adopters will benefit and establish themselves as leaders in the industry. Similar to internet infrastructure, real estate is driven by consumers’ desire for efficiency and convenience with AI. PCOR (We’re First) stands out in the space; An industry where pen and paper are the norm, use build and workflow data to provide insights and process optimization… Procore does not appear to monetize AI separately from its product offering, instead working to increase the integration of AI and product offerings.Provides early adoption And innovation with AI has a lot of growth potential, along with collecting more data to become a leader in the field.”
Looking ahead, Gogolev sees his position warranting an Overweight (ie Buy) rating, while the $85 price target suggests an upside potential of approximately 36% for the coming year.
Overall, this building technology company has 13 recent reviews from Street analysts, and those ratings include 12 Buys for 1 Hold for a Strong Buy consensus rating. The stock is selling for $62.26 and carries an average price target of $82.45, which indicates it will be up 32% by next year. (be seen Procore Inventory Outlook)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.