Chicago, IL – December 17, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Five9 Inc. FIVN, Innodata Inc. INOD, AudioEye Inc. AEYE, UiPath Inc. PATH and BigBear.ai Holdings Inc. BBAI.
Wall Street witnessed an astonishing bull run in the past 24 months. The major driver of last year and this year’s rally has been the globally booming artificial intelligence (AI), especially generative AI. Companies that have extensively applied AI in their final products have become multi-baggers this period. Some stock prices have skyrocketed 300-400% during this period.
Whenever financial researchers discuss this booming generative AI space, they generally highlight large-cap technology stocks, focusing on how AI has changed their business model and prospects and prompted the meteoric rise in their stock prices.
However, we should not forget small and mid-sized stocks with extensive exposure to AI. Some of these stocks have already skyrocketed in 2024 and are awaiting further growth in 2025.
We recommend five such stocks irrespective of their stock price performance in 2024. These are: Five9 Inc., Innodata Inc., AudioEye Inc., UiPath Inc. and BigBear.ai Holdings Inc.
The astonishing rally of U.S. stocks that started at the beginning of 2023 was predominantly driven by the technology sector. An unprecedented adoption of generative AI technology across the world was the prime factor.
Bloomberg Intelligence estimates that generative AI spending will increase from $67 billion in 2023 to $1.3 trillion by 2032. UBS estimated that four U.S. technology giants that are member of the so-called “Magnificent 7” will allocate around $267 billion as capital expenditure on AI applications in 2025, suggesting a jump of 33.5% year over year.
These stocks have strong earnings and revenue growth potential for 2025. Moreover, they have seen positive earnings estimate revisions for 2025 in last 60 days, indicating that market participants are expecting strong business in 2025. Each of our picks currently carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Five9 Inc.
Zacks Rank #1 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, which enables the breadth of contact center-related customer service, sales, and marketing functions.
FIVN’s platform comprises interactive virtual agent, agent assist, workflow automation, workforce engagement management, AI insights, and AI summaries. It allows managing and optimize customer interactions across voice, chat, email, web, social media, and mobile channels directly or through its application programming interfaces.
FIVN saw its subscription revenues increase by 20% in third-quarter 2024, with total revenues up 15%. FIVN posted an adjusted EBITDA margin of 20%, helping it produce an operating cash flow of $41 million. Management raised its outlook for 2025.
Five9 has an expected revenue and earnings growth rate of 10.4% and 8.2%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 3.2% over the last 60 days.
FIVN was a laggard in the stock market with a return of negative 46.4% year to date. However, the average short-term price target of brokerage firms represents an increase of 19% from the last closing price of $42.21. The brokerage target price is currently in the range of $40 to $67. This indicates a maximum upside of 58.7% and a downside of 5.2%.
Innodata Inc.
Zacks Rank #1 Innodata operates as a global data engineering company in the United States, the United Kingdom, the Netherlands, Canada, and internationally. INOD operates through three segments: Digital Data Solutions (DDS), Synodex, and Agility.
The DDS segment engages in the provision of AI data preparation services, collecting or creating training data, annotating training data, and training AI algorithms for its customers, as well as AI model deployment and integration services. DDS also provides a range of data engineering support services, including data transformation, data curation, data hygiene, data consolidation, data extraction, data compliance, and master data management.
INOD is focused on supporting Big Tech companies in developing generative model models. This strategy paid off in third-quarter 2024 as the company generated revenues of $30.6 million from a single Big Tech customer.
Innodata has an expected revenue and earnings growth rate of 22.5% and a negative 5.3%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 20.3% over the last 60 days.
The stock price of INOD has skyrocketed with a return of 323.8% year to date. Despite this massive rally, the average short-term price target of brokerage firms represents an increase of 17% from the last closing price of $34.50. The brokerage target price is currently in the range of $38 to $45. This indicates a maximum upside of 30.4% and no downside.
AudioEye Inc.
Zacks Rank #2 AudioEye is engaged in creating cloud-based cross-platform/cross-browser screen reader solutions for web browsing. AEYE focuses on creating voice driven technologies to enhance the mobility, usability, and accessibility of the Internet-based content in the United States.
AEYE offers AudioEye, an AI-powered always-on testing, remediation, and monitoring solution that improves conformance with web content accessibility guidelines, identifies and fixes accessibility errors and addresses a range of disabilities, including dyslexia, color blindness, epilepsy, and others. AEYE’s AI applications has the potential to dramatically improve web accessibility.
AudioEye has an expected revenue and earnings growth rate of 21.9% and 31.7%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 17% over the last 60 days.
The stock price of AEYE has soared with a return of 212.2% year to date. Despite this big appreciation, the average short-term price target of brokerage firms represents a jump of 89.1% from the last closing price of $16.92. The brokerage target price is currently in the range of $32.5 to $37. This indicates a maximum upside of 118.7% and no downside.
UiPath Inc.
Zacks Rank #2 UiPath provides an end-to-end automation platform that offers a range of robotic process automation (RPA) 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.
PATH’s platform's embedded AI, ML (machine learning), 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 10.7% and 4.6%, respectively, for next year (ending January 2026). The Zacks Consensus Estimate for next-year earnings has improved 6.7% over the last 30 days.
PATH was also a laggard in the stock market with a return of negative 43.6% year to date. Nevertheless, the average short-term price target of brokerage firms represents an increase of 9.6% from the last closing price of $14.01. The brokerage target price is currently in the range of $12 to $19. This indicates a maximum upside of 35.7% and a downside of 14.3%.
BigBear.ai Holdings Inc.
Zacks Rank #2 BigBear.ai Holdings provides artificial intelligence-powered decision intelligence solutions. BBAI offers national security, supply chain management, and digital identity and biometrics solutions.
BBAI provides data ingestion, data enrichment, data processing, artificial intelligence, machine learning, predictive analytics, and predictive visualization solutions and services. BBAI serves U.S. defense and intelligence agencies, border protection, transportation security, manufacturing, distribution and logistics, travel, entertainment, and tourism sectors.
BigBear.ai Holdings has an expected revenue and earnings growth rate of 15.3% and 73.3%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 13% over the last 60 days.
The stock price of BBAI advanced 17.8% year to date. The average short-term price target of brokerage firms represents an increase of 12.8% from the last closing price of $2.52. The brokerage target price is currently in the range of $2.50 to $3.50. This indicates a maximum upside of 40% and no downside.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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