3 Undervalued AI Stocks Trading Below Their True Potential

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artificial intelligence (A.I) is now the top buzzword in the investment space. Companies diving into this new technology are getting a lot of attention — others might say. Undeserved Attention (at least for some stocks), but that’s a discussion for another day. Instead, we’ll discuss undervalued AI stocks that are far below their potential.

Such AI companies exhibit great potential, great market saturation and financial performance that are poised for growth. For one reason or another, they have been left out of the trending AI stocks, causing their prices to fall and being marked as “underperformers”. This is good because investors can now swoop in and buy premium stocks at huge discounts.

So, let’s discuss. Why These undervalued AI stocks deserve your attention.

TaskUs (TASK)

Source: Sittipong Phokawattana / Shutterstock

Known for its “people first” culture, TaskUs (Nasdaq:Task) is a tech company that outsources digital services and customer experience to companies to help them grow and protect their brands.

It uses a cloud-based infrastructure that allows its clients to outsource many of their core processes over the life of their company. TaskUs works with customers in a variety of industries, including fintech, health tech, ride sharing, food delivery and other tech companies.

The company’s omni-channel delivery model offers three core services: artificial intelligence services, trust and safety and customer experience (digital CX). Its Assist AI allows its clients to leverage the expertise of their people and the power of GenAI to increase productivity and turbocharge efficiency.

TaskUs reported a marginal decline of 3.3% YOY in total revenue for FY’23. However, GAAP net income was 13% higher than in 2022, while diluted EPS rose 23.1%. Free cash flow also increased by 9%.

While that may sound modest, according to co-founder and CEO Bryce Maddock, the company was actually ahead of its total revenue and EBITDA guidance despite macroeconomic headwinds.

TaskUs also announced the expansion of its client base into new sectors such as healthcare and banking, further strengthening its position in serving fast-growing technology companies. The company’s flexibility and continued growth of its client base suggests it’s poised to grow in the coming years, making TASK stock one of the most attractive, undervalued AI companies out there. Is.

Color Central (RNG)

Source: OpturaDesign/Shutterstock.com

Color Central (NYSE:RNG) is a leading cloud communications provider due to its advanced AI-powered cloud business communications, hybrid event and connectivity solutions.

As a cloud communication provider, the company offers its customers a complete suite of business communication tools within its platform that allows them to run webinars, video meetings, events and contact center solutions.

It recently announced RingCX’s expanded footprint, allowing even more customers voice call routing, advanced analytics and more than 20 digital channels in a single solution.

RingCentral’s FY’23 numbers did not disappoint. Total revenue increased 11% to $2.2 billion, and subscription revenue increased 11% to $2.329 billion.

In addition, the company showed a bottom-line recovery, recording a net loss of $1.74 per share, a significant improvement from the loss of $9.23 in 2022. Its strategic focus to become an AI-first multi-product company is paying off, as evidenced. Through solid traction with your new products.

While it may not be giving investors solid price performance, its continued growth and initiatives should be enough to give investors a second look at RingCentral before it truly takes off.

Opera Ltd (OPRA)

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Oprah (Nasdaq:Opera), probably best known for its mobile browser, is a Norwegian tech firm specializing in web browser development. Its operations focus on browser technology, AI-powered content discovery and recommendation platforms.

Opera’s main sources of revenue are search, advertising and technology licensing from mobile communications operators and device manufacturers. It recently announced that its new browser will get new and advanced AI features to help it stand out against its competitors.

Opera had a stellar FY23, exceeding expectations with a year of solid growth and increased margins.

Revenue grew 20% YOY, while adjusted EBITDA reached $93.7 million and grew 38%. More importantly, net income and diluted earnings per share registered impressive growth of 1,027% and 1,231% respectively.

Its focus on high ARPU customers and its advertising ecosystem have contributed to its success, evident in the growth in advertising and search revenue and continued growth in monthly active users.

Opera’s outlook expects FY’24 revenue to reach $450-465 million and an adjusted EBITDA margin of 24%.

With continued investment in AI and a focus on innovation, it’s only a matter of time before investors see its true value. Really, it’s a worthy addition to any undervalued AI stock worth keeping an eye on.

As of the date of publication, Rick Orford had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com. Publication Guidelines.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer and mentor. His work has appeared in highly regarded publications, including Good Morning America, The Washington Post, Yahoo Finance, MSN, Business Insider, NBC, Fox, CBS, and ABC News.

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