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Yahoo
15 hours ago
- Business
- Yahoo
Buy 5 AI Laggards of Past Month to Tap Solid Upside in the Short Term
The artificial intelligence (AI)-driven astonishing bull run of 2023 and 2024 has suffered major hurdles in 2025. The tariff and trade policies of the Trump administration, the Fed's ambiguity over further rate cuts this year, fears of a near-term recession and the availability of a low-cost Chinese AI platform have unnerved investors. However, the technology sector has lately returned to its northward trajectory. Expectations of a U.S.-China trade deal and the ongoing negotiations with several other major trading partners of the United States boosted market participants' confidence. Despite these positives, several large-cap AI stocks provided negative returns in the past month. Surprisingly, a handful of these stocks with a favorable Zacks Rank currently offer strong price upside potential in the short term. Five such stocks are: Arista Networks Inc. ANET, HubSpot Inc. HUBS, Twilio Inc. TWLO, Adobe Inc. ADBE and Okta Inc. OKTA. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. The chart below shows the price performance of our five picks in the past month. Image Source: Zacks Investment Research Zacks Rank #2 Arista Networks is well-positioned with the right network architecture for client-to-campus data center cloud and AI networking backed by three guiding principles. These include the best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms. ANET's EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, deep-dive analytics, and proactive performance issue resolution. Its AI suite also focuses on network security and optimization. ANET's AI-powered cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration. Arista AVA offers augmentation of pervasive visibility, continuous threat detection, and enforcement. The growing demand for 200- and 400-gig high-performance switching products augurs well for ANET's long-term growth. Arista Networks has an expected revenue and earnings growth rate of 18.7% and 12.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.6% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 23.4% from the last closing price of $90.24. The brokerage target price is currently in the range of $87-$130. This indicates a maximum upside of 44% and a downside of 3.6%. Zacks Rank #2 HubSpot provides a cloud-based customer relationship management platform for businesses in the Americas, Europe, and the Asia Pacific. HUBS is witnessing steady multi-hub adoption from enterprise customers in the premium market. Pricing optimization in HUBS' starter edition is leading to solid client additions in the lower end of the market. The integration of HubSpot AI, which includes state-of-the-art features, such as AI assistance, AI agents, AI insights and ChatSpot, is driving more value to customers. HUBS' seat pricing model lowers the barrier for customers to get started with its business and mitigates pricing friction for upgrades. The growing adoption of inbound applications is a tailwind. HubSpot has an expected revenue and earnings growth rate of 15.4% and 15%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% in the last 30 days. The short-term average price target of brokerage firms for the stock represents an increase of 37.5% from the last closing price of $544.46. The brokerage target price is currently in the range of $645-$930. This indicates a maximum upside of 70.8% and no downside. Zacks Rank #1 Twilio is a leading provider of cloud communications Platform-as-a-Service in the United States and internationally. TWLO is focusing on generative AI offerings to tap the growing opportunities in this space. In this regard, TWLO launched Customer AI technology in June 2023, which powerfully combines customer engagement platform data, generative and predictive AI, and large language models (LLMs) to unlock stronger customer relationships for brands. TWLO is integrating generative AI capabilities across its platform and every customer touchpoint. The company believes that by training LLMs for customers with their data inside its Segment customer data platform, Twilio will be able to help customers enter the AI race multiple steps ahead of their peers. TWLO has also partnered with Alphabet Inc. (GOOGL) for Google Cloud to integrate generative AI into the Twilio Flex customer engagement platform. Twilio's initiative to integrate generative and predictive AI technology across its platform is likely to boost its revenue growth over the long run. Twilio enables companies to create personalized, customer-aware experiences powered by OpenAI. Through this integration, Twilio customers will be able to use OpenAI's GPT-4 model to power new generative capabilities in Twilio Engage, its multichannel marketing solution built on the Segment Customer Data Platform. Twilio has an expected revenue and earnings growth rate of 7.9% and 22.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.9% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 10.8% from the last closing price of $116.68. The brokerage target price is currently in the range of $75-$170. This indicates a maximum upside of 45.7% and a downside of 35.7%. Zacks Rank #2 Adobe has extensively implemented AI applications across its flagship products, such as Photoshop, Illustrator, Lightroom, and Premiere. Earlier this year, ADBE introduced generative AI-driven Adobe Firefly. Moreover, Adobe Acrobat and Reader AI Assistant help users summarize documents and answer questions, saving time and helping users accomplish tasks faster. Using its new AI-driven cloud-based platform, ADBE is also diversifying into digital marketing services, offering data mining services that help businesses measure page views, purchases and social media sites. Adobe Marketing Cloud enables marketers to deliver personalized web experiences across multiple devices, manage multichannel campaigns and optimize media monetization. ADBE has launched Adobe Express, an application for quick editing effects. Leveraging generative AI, this tool is useful for short-form video content like Instagram Reels. Adobe also launched an AI-based Express app for iOS and Android. Adobe has an expected revenue and earnings growth rate of 9.5% and 11.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% in the last seven days. The average short-term price target of brokerage firms represents an increase of 29.7% from the last closing price of $378.04. The brokerage target price is currently in the range of $380-$605. This indicates a maximum upside of 60.1% and no downside. Zacks Rank #2 Okta operates as an identity partner in the United States and internationally. OKTA offers a suite of products and services used to manage and secure identities, such as Single Sign-On, which enables users to access applications in the cloud or on-premises from various devices. OKTA leverages AI through its Okta AI platform, which enhances security while improving user experience and simplifying administration. Key applications include Identity Threat Protection, Log Investigator, and Auth for GenAI. This AI-enabled platform is integrated with OKTA's Workforce Identity and Customer Identity Clouds. OKTA's Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications and data, while API Access Management enables organizations to secure APIs. Access Gateway enables organizations to extend Workforce Identity Cloud, and Okta Device Access enables end users to securely log in to devices with Okta credentials. OKTA has expected revenue and earnings growth rates of 9.4% and 16.7%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 2.8% over the last 30 days. The average short-term price target of brokerage firms represents an increase of 26.2% from the last closing price of $99. The brokerage target price is currently in the range of $75-$142. This indicates a maximum upside of 43.4% and a downside of 24.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Adobe Inc. (ADBE) : Free Stock Analysis Report Arista Networks, Inc. (ANET) : Free Stock Analysis Report HubSpot, Inc. (HUBS) : Free Stock Analysis Report Twilio Inc. (TWLO) : Free Stock Analysis Report Okta, Inc. (OKTA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
26-05-2025
- Business
- Yahoo
Buy 5 Internet-Centric AI Stocks on the Dip to Boost Portfolio Returns
The artificial intelligence (AI)-driven astonishing bull run of 2023 and 2024 has suffered major hurdles in 2025. The highly overstretched valuation of U.S. stocks, stocks inflation, several weak economic data, geopolitical conflicts and severe concerns related to the Trump administration's tariff and trade policies significantly dented market participants confidence in risky assets like equities. The technology sector has suffered the most since these stocks, especially the AI-focused ones, have skyrocketed in the last two years. Meanwhile, the current low valuation of these stocks provides a good opportunity for investors. Here we recommend five Internet-based AI stocks with a favorable Zacks Rank to buy on the dip. These stocks are: Arista Networks Inc. ANET, Fastly Inc. FSLY, Five9 Inc. FIVN, HubSpot Inc. HUBS and Twilio Inc. TWLO. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The chart below shows the price performance of our five picks year to date. Image Source: Zacks Investment Research Arista Networks is well-positioned with the right network architecture for client-to-campus data center cloud and AI networking backed by three guiding principles. These include the best-in-class, highly proactive products with resilience, zero-touch automation and telemetry with predictive client-to-cloud one-click operations with granular visibility and prescriptive insights for deeper AI algorithms. ANET's EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, deep-dive analytics, and proactive performance issue resolution. Its AI suite also focuses on network security and optimization. ANET's AI-powered cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration. Arista AVA offers augmentation of pervasive visibility, continuous threat detection, and enforcement. The growing demand for 200- and 400-gig high-performance switching products augurs well for ANET's long-term growth. Arista Networks has an expected revenue and earnings growth rate of 18.7% and 12.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% in the last 30 days. ANET is currently trading at a discount of 31.6% from its 52-week high price. Fastly provides infrastructure software offering cloud computing, image optimization, security, edge computer technology and streaming solutions. On Dec.16, 2024, FSLY unveiled Fastly AI Accelerator, a semantic caching solution that allows developers to optimize their LLM (large language model) generative AI applications. FSLY operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. FSLY's Edge Cloud Platform offers more efficient performance as developers need only a single line of code instead of repeated calls to the AI provider to update their application to a new API endpoint. Fastly has an expected revenue and earnings growth rate of 8.7% and 16.7%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 9.1% over the last 30 days. FSLY is currently trading at a discount of 40.5% from its 52-week high price. Five9 provides intelligent cloud software for contact centers in the United States, India, and internationally. FIVN offers a virtual contact center cloud platform that delivers a suite of applications, enabling a broad range of contact center-related customer service, sales, and marketing functions. FIVN's platform comprises interactive virtual agents, agent assistance, workflow automation, workforce engagement management, AI insights, and AI summaries. It allows management and optimization of customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. FIVN has been benefiting from the growing adoption of AI tools in its call center services, with personalized AI agents emerging as a major growth driver. On Feb. 19, Five9 introduced its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud space. FIVN also released new Five9 AI agents tailor-made for Google Cloud. Five9 has an expected revenue and earnings growth rate of 9.6% and 11.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the last 30 days. FIVN is currently trading at a discount of 47.6% from its 52-week high price. HubSpot provides a cloud-based customer relationship management platform for businesses in the Americas, Europe, and the Asia Pacific. HUBS is witnessing steady multi-hub adoption from enterprise customers in the premium market. Pricing optimization in HUBS' starter edition is leading to solid client additions in the lower end of the market. The integration of HubSpot AI, which includes state-of-the-art features, such as AI assistance, AI agents, AI insights and ChatSpot, is driving more value to customers. HUBS' seat pricing model lowers the barrier for customers to get started with its business and mitigates pricing friction for upgrades. The growing adoption of inbound applications is a tailwind. HubSpot has an expected revenue and earnings growth rate of 15.4% and 14.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% in the last 30 days. HUBS is currently trading at a discount of 30.2% from its 52-week high price. Twilio is a leading provider of cloud communications Platform-as-a-Service (PAAS) in the United States and internationally. TWLO is focusing on generative AI offerings to tap the growing opportunities in this space. In this regard, TWLO launched Customer AI technology in June 2023, which powerfully combines customer engagement platform data, generative and predictive AI, and LLMs to unlock stronger customer relationships for brands. TWLO is integrating generative AI capabilities across its platform and every customer touch point. The company believes that by training LLMs for customers with their data inside its Segment customer data platform, Twilio will be able to help customers enter the AI race multiple steps ahead of their peers. TWLO has also partnered with Alphabet Inc. (GOOGL) for Google Cloud to integrate generative AI into the Twilio Flex customer engagement platform. Twilio's initiative to integrate generative and predictive AI technology across its platform is likely to boost its revenue growth over the long-run. Twilio enables companies to create personalized, customer-aware experiences powered by OpenAI. Through this integration, Twilio customers will be able to use OpenAI's GPT-4 model to power new generative capabilities in Twilio Engage, its multichannel marketing solution built on the Segment Customer Data Platform. Twilio has an expected revenue and earnings growth rate of 7.8% and 22.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.1% in the last 30 days. TWLO is currently trading at a discount of 25.3% from its 52-week high price. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arista Networks, Inc. (ANET) : Free Stock Analysis Report HubSpot, Inc. (HUBS) : Free Stock Analysis Report Five9, Inc. (FIVN) : Free Stock Analysis Report Twilio Inc. (TWLO) : Free Stock Analysis Report Fastly, Inc. (FSLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
30-03-2025
- Business
- Yahoo
5 High-Quality AI-Infrastructure Stocks to Buy at Lucrative Valuations
U.S. stock markets are likely to close the first quarter on a negative note. Wall Street is likely to remain volatile primarily due to uncertainty regarding the Trump administration's tariffs and trade policies, as well as their impact on the U.S. economy, particularly on an already elevated inflation rate. Moreover, the fear of a near-term recession dampened investors' confidence in risky assets like equities. At this juncture, we recommend five AI-related stocks with a favorable Zacks Rank to invest on the dip. These are Arista Networks Inc. ANET, UiPath Inc. PATH, Jabil Inc. JBL, BWX Technologies Inc. BWXT and Five9 Inc. FIVN. Wall Street's high-flying northward journey from January 2023 to January 2025 was predominantly supported by an astonishing rally in the technology sector, buoyed by the explosive growth of generative artificial intelligence (AI). However, as U.S. stock markets are facing a downturn and a near-term recession looms large, investors are gradually booking profits in tech stocks, for which valuations are extremely overstretched. Meanwhile, through this process of sectoral churn, several good-quality AI-related stocks have turned attractive. These AI stocks have strong growth potential for 2025 and beyond. Further, these stocks have seen positive earnings estimate revisions over the past 60 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The chart below shows the price performance of our five picks year to date. Image Source: Zacks Investment Research Arista Networks has been benefiting from positive demand trends owing to its strong product portfolio, which is highly scalable, programmable and provides data-driven automation, analytics and support services. ANET's EOS Smart AI Suite and Arista AVA (Autonomous Virtual Assist) enhance AI job monitoring, deep-dive analytics, and proactive performance issue resolution. Its AI suite also focuses on network security and optimization. ANET's AI-powered cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration. Arista Networks should benefit from its software-driven, data-centric approach that helps customers build their cloud architecture and enhance the cloud experience they offer their clients. Arista AVA offers augmentation of pervasive visibility, continuous threat detection, and enforcement. The growing demand for 200- and 400-gig high-performance switching products augurs well for ANET's long-term growth. Arista Networks has an expected revenue and earnings growth rate of 18.1% and 12.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.8% in the past 60 days. ANET has a long-term (3-5 years) earnings growth rate of 14.4%. The company has an ROE of 29.91% compared with 0.73% of the industry and 17.11% of the S&P 500. Arista Networks is currently trading at a 40.8% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 48.3% from the last closing price of $78.96. UiPath provides an end-to-end automation platform that offers a range of robotic process automation solutions primarily in the United States, Romania, the United Kingdom, the Netherlands, and internationally. PATH offers a suite of interrelated software to build, manage, run, engage, measure, and govern automation within the organization. The PATH platform's embedded AI, ML, and NLP (Natural Language Processing) capabilities improve decisioning and information processing. PATH introduced new generative AI features, including specialized LLMs (Large Language Model) such as DocPATH and CommPATH, and Context Grounding, to enhance automated AI models for specific business needs. UiPath has an expected revenue and earnings growth rate of 6.8% and 0%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 10.4% in the past 30 days. PATH has a long-term earnings growth rate of 19%. UiPath is currently trading at a 52.8% discount to its 52-week high price. The average short-term price target of brokerage firms represents an increase of 6.7% from the last closing price of $10.87. Jabil has been benefiting immensely from healthy momentum in the capital equipment, AI-powered data center infrastructure, cloud, and digital commerce business verticals. Its focus on end-market and product diversification is a key catalyst. Jabil's target that 'no product or product family should be greater than 5% operating income or cash flows in any fiscal year' is commendable. JBL's high free cash flow indicates efficient financial management practices, optimum utilization of assets, and improved operational efficiency. Massive application of generative AI is set to drastically increase the efficiency of JBL's automated optical inspection machines for automation industry. Jabil has an expected revenue and earnings growth rate of -3.4% and 5.5%, respectively, for the current year (ending August 2025). The Zacks Consensus Estimate for current-year earnings has improved 2.3% over the past seven days. JBL has a P/E ratio of 16.06X compared with 17.20X of the industry and 18.53X of the S&P 500. It has a P/S ratio of 0.57X compared with 0.57X of the industry and 2.94X of the S&P 500. JBL has an ROE of 49.64% compared with 10.61% of the industry and 17.11% of the S&P 500. It has a long-term earnings growth rate of 12.5%. Jabil is currently trading at a 20.3% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 21.3% from the last closing price of $139.40. BWX Technologies manufactures and sells nuclear components in the United States, Canada, and internationally. BWXT operates through two segments, Government Operations and Commercial Operations. BWXT supplies precision-manufactured components and services to the commercial nuclear power industry. BWXT offers technical, management and site services to governments in complex facilities and environmental remediation activities. BWXT has landed deals and partnerships with the U.S. Department of Defense to help build a cutting-edge micro-nuclear reactor. It is also working alongside key commercial nuclear energy companies such as GE Vernova and SMR standout TerraPower. The energy-hungry AI space has made nuclear energy one of the hottest industries on Wall Street over the past year. In December 2024, the US Department of Energy (DOE) reported that data center energy usage will 'double or triple by 2028,' after doubling over the past decade. A research report by Rystad Energy predicted that the combined expansion of traditional and AI-driven data centers, along with chip foundries, will increase the cumulative demand for U.S. electric power by 177 TWh from 2023 to 2030, reaching a total of 307 TWh. BWX Technologies has an expected revenue and earnings growth rate of 11.5% and 4.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past seven days. BWXT has a P/E ratio of 29.37X compared with 31.11X of the industry and 18.53X of the S&P 500. It has an ROE of 30.00% compared with 10.34% of the industry and 17.11% of the S&P 500. BWXT has a long-term earnings growth rate of 11.5%. BWX Technologies is currently trading at a 25.6% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 30.6% from the last closing price of $101.44. Five9 provides intelligent cloud software for contact centers in the United States, India, and internationally. FIVN offers a virtual contact center cloud platform that delivers a suite of applications, enabling a broad range of contact center-related customer service, sales, and marketing functions. FIVN's platform comprises interactive virtual agents, agent assistance, workflow automation, workforce engagement management, AI insights, and AI summaries. It allows management and optimization of customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces. FIVN has been benefiting from the growing adoption of AI tools in its call center services, with personalized AI agents emerging as a major growth driver. On Feb. 19, Five9 introduced its Intelligent CX Platform powered by Five9 Genius AI on the Google Cloud space. FIVN also released new Five9 AI agents tailor-made for Google Cloud. Five9 has an expected revenue and earnings growth rate of 9.8% and 5.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the past 60 days. FIVN has a P/E ratio of 11.39X compared with 27.65X of the industry and 18.53X of the S&P 500. It has a P/S ratio of 2.16X compared with 3.71X of the industry and 2.94X of the S&P 500. FIVN has a long-term earnings growth rate of 16.9%. Fivn9 is currently trading at a 53.8% discount to its 52-week high price. The short-term average price target of brokerage firms for the stock represents an increase of 87% from the last closing price of $29.32. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Jabil, Inc. (JBL) : Free Stock Analysis Report UiPath, Inc. (PATH) : Free Stock Analysis Report Arista Networks, Inc. (ANET) : Free Stock Analysis Report Five9, Inc. (FIVN) : Free Stock Analysis Report BWX Technologies, Inc. (BWXT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
