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an investor bought a stock Nvidia (NVDA -0.95%) Fists passed last year as excitement about artificial intelligence (AI) permeated the stock market. In fact, this AI chip maker has seen its share price rise by 239%, making it the world’s best-performing stock. S&P500 Nvidia is already ahead by another 20% in 2024, but Wall Street now sees even more upside potential for other AI stocks.
To elaborate, NVIDIA’s median analyst price target is $650 per share, implying a 9% upside.but trade desk (TTD -1.61%) The median price target is $83 per share, suggesting 20% upside.and Docebo (DCBO -1.39%) The median price target is $56 per share, suggesting 24% upside potential.
Here’s what investors need to know about these two AI stocks.
1. Trade Desk
The Trade Desk operates the largest independent ad tech platform for media buyers. The company’s software uses artificial intelligence (AI) to help advertisers create, measure, and optimize campaigns across digital channels. The Trade Desk is a market leader in connected TV (CTV) advertising and is rapidly gaining influence in off-site retail media, two of the fastest growing segments of the broader digital advertising market. .
One reason The Trade Desk has been so successful is its independent business model. That means the company doesn’t own any media that could bias ad spending, and it doesn’t compete with publishers by selling ad inventory. Publishers are more willing to share data with non-competitors like The Trade Desk rather than with other publishers like The Trade Desk. alphabetis a company that monetizes media properties like Google Search and YouTube with advertising.
Our unique combination of independence and scale has enabled The Trade Desk to attract numerous import partners. We source data and inventory from most major CTV publishers, including: Walt DisneyWe obtain data from many major retailers, including: walmart. That’s why The Trade Desk provides measurement capabilities that media buyers can’t find on other ad tech platforms.
Differentiated AI is a natural outgrowth of robust and unique data. for that, morgan stanley considers The Trade Desk to be one of 11 companies best positioned to benefit from AI, and consulting firm Quadrant Knowledge Solutions ranks The Trade Desk among the most technologically sophisticated ad techs on the market. We rate it as a platform and it even outperforms Google.
Going forward, ad tech spending is projected to grow at 14% annually through 2030, but The Trade Desk should outperform the industry given its strong market position. In fact, Wall Street predicts that annual sales over the next five years will increase by 21%. In that context, the current valuation of 19.4 times sales is acceptable. Patient investors with a five-year horizon should consider buying a small position in this growth stock now.
2. Docebo
Docebo operates a learning management system. Its platform consists of several applications that help companies create, distribute, and measure the impact of training content across internal employees and external audiences. Two applications are particularly noteworthy because they demonstrate trends in innovation and offer significant growth opportunities.
Docebo Shape uses generative AI to automate content creation, turning source materials such as documents, presentations, and case studies into corporate training materials. Docebo Flow embeds learning content into other software products, making it useful for external use cases such as customer training. For example, Flow allows companies to embed learning into customer-facing applications to educate new users.
Docebo has gained a strong presence in the market through consistent innovation. European industry analyst Fosway Group has recognized the company’s leadership in learning management systems for the sixth year in a row. Additionally, Morgan Stanley analyst Josh Baer selected Docebo stock as a top generative AI prospect in 2024. He said the company is not only disrupting the market for internal learning, but also leading the market in external use cases.
Docebo is an unfamiliar name to many investors, but the company has some big customers, including two of the world’s five largest technology companies. The first one Amazon The second name is unknown, but all evidence points to Google.
Meanwhile, Docebo also partnered with Google Cloud to advance its generative AI product roadmap. In 2024, new features will be added to Shape, including virtual role play with real-time feedback and integrated CoPilot to simplify the creation of learning content. According to management, “Shape will fundamentally change the way training materials are created and consumed.”
With this in mind, the learning management systems market is projected to grow at 20% per year through 2030, and Wall Street expects Docebo’s sales to grow 25% per year over the next five years. Based on this consensus estimate, the current valuation of 9 times sales looks really cheap. The market has overlooked this little-known software stock, creating a great buying opportunity for patient investors.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Trevor Jennewine has held positions at Amazon, Nvidia, The Trade Desk, and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Amazon, Docebo, Nvidia, The Trade Desk, Walmart, and Walt Disney. The Motley Fool has a disclosure policy.
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