UiPath, SentinelOne, and Baidu AI plays are ignored.
The explosive growth of the artificial intelligence (AI) market has lit a smoldering fire under tech titans such as Nvidia And Microsoft during the past year. But as those AI darlings grew, many other AI-related businesses faded into the dust.
Three of them were stocks. UiPath (PATH -2.82%), Sentinel One (S -3.42%)And Bedouin (BIDU -4.67%). Today, I’ll explain why these three out-of-favor AI stocks could go much higher in the near future.
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1. UiPath
UiPath develops robotic process automation (RPA) tools that can be plugged into a company’s existing software applications to automate repetitive tasks such as data entry, processing invoices, onboarding customers Boarding, and sending mass emails. According to , it is the largest RPA company in the world. Gartnerand UiPath serves more than 10,800 customers in more than 100 countries.
UiPath’s growth accelerated throughout the pandemic as more companies replaced their human workers with its RPA tools. In fiscal 2023 (which ends January 31, 2023), its revenue grew 19% even as inflation, rising interest rates, geopolitical conflicts, and other macro headwinds forced many companies to rein in spending. Forced to put.
In fiscal 2024, UiPath’s revenue grew 24% after some of these pressures eased. For fiscal 2025, the company expects a further 19% revenue growth. Analysts expect its adjusted EPS to rise 6%.
UiPath’s stock doesn’t look overpriced at 8 times this year’s sales, but it still trades at less than 60% of its IPO price for two reasons: It still follows generally accepted accounting principles (GAAP). , and investors are concerned that new creative AI tools like ChatGPT could replace UiPath’s stand-alone RPA offerings. UiPath insists that generative AI tools will actually strengthen its RPA services with new features, and that the company will continue to evolve as it develops more advanced AI tools to automate data analysis. If UiPath achieves these goals, its stock could rise back toward its IPO price.
2. Sentinel One
SentinelOne is a cybersecurity company that provides extended detection and response (XDR) tools through a hybrid mix of on-site appliances and cloud-based services. It believes its Singularity XDR platform, powered entirely by AI algorithms, will help companies respond to cyber attacks more effectively and eliminate the need for human analysts. It’s a small company, but three of the Fortune 10 companies and hundreds of Global 2000 enterprises already use its services.
SentinelOne’s revenue more than doubled in fiscal 2023 (which ended last January) and grew another 47% in fiscal 2024. It expects a growth of 31% to 32% in FY2025.
SentinelOne’s growth is gradually slowing, but it’s still gaining large customers that generate more than $100,000 in annual recurring revenue (ARR) as the company comfortably increases its dollar-based net retention rate to 100%. Holds up. SentinelOne’s stock still trades about 40% below its IPO price, looking reasonably valued compared to its 8-fold growth in sales this year, and the company last year before deciding to go independent. Sal had reportedly made some takeover bids.
SentinelOne isn’t profitable by GAAP or non-GAAP measures, but it could reduce losses as it expands business and locks more companies into its XDR platform. If Sentinel One consolidates its business, the shares may rise over the next few years.
3. Bedouin
Baidu operates the largest online search engine in China. It also owns one of the country’s leading cloud infrastructure platforms, and has become a major player in the AI race with its Ernie chatbot and Apollo driverless vehicles. Baidu’s mobile app served 667 million monthly active users at the end of 2023, and it owns a majority stake in the streaming video platform. iQiyi.
In 2022, Baidu’s revenue fell 1% as its adjusted earnings per American Depositary Share (ADS) rose 10%. The slowdown was caused by macro headwinds in China, which forced many companies to rein in their advertising and cloud spending. Strong competition from The Bite DanceKeyDwayne (known as TikTok abroad) and TencentWeChat added to this pressure in digital advertising.
In 2023, Baidu’s revenue and adjusted earnings per ADS grew by 9% and 37%, respectively. It consolidated its core advertising segment by expanding its managed business pages — which manage the company’s presence across its ecosystem — to stop relying on traditional search and display advertising. It also continued to expand smaller cloud and AI divisions.
In 2024, analysts expect Baidu’s revenue to grow by 7% as its revenue declines by 3%. That growth rate may seem tepid, but its stock looks 10 times cheaper on forward earnings — and could rise if the bulls again embrace Chinese tech stocks.
Leo Sun has no position in any stocks. The Motley Fool has positions and recommends Baidu, Microsoft, Nvidia, Tencent, and UiPath. The Motley Fool recommends Gartner and iQIYI and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a Disclosure Policy.