Title: Alteryx Emerges as Wall Street’s Top AI Stock Pick, Outshining Nvidia
In recent years, Nvidia has enjoyed its status as a Wall Street darling, thanks to the increasing demand for its graphics processing units (GPUs) in the gaming and artificial intelligence (AI) industries. However, analysts’ latest favor appears to be directed towards a different AI stock that is gaining bullish traction: Alteryx.
Alteryx operates a cloud-based platform that simplifies data analytics for users, eliminating the need for coding. This platform has garnered over 8,300 customers worldwide, including major industry players such as Chevron, Netflix, Pfizer, and Visa.
Wall Street analysts have expressed their optimism towards Alteryx, with an average 12-month price target reflecting a potential upside of 47%. In fact, even the most pessimistic price target among the 14 analysts surveyed by Refinitiv remains more than 20% higher than Alteryx’s current share price.
In comparison, the consensus price target for Nvidia only reflects an upside potential of 12%. As for the high-flying AI stock C3.ai, most analysts predict a decline over the next 12 months, with the average price target nearly 30% below its current share price.
While Nvidia, C3.ai, and other AI stocks have experienced impressive gains in 2023, Alteryx’s shares have fallen this year, which prompts the question: Is Alteryx truly an AI stock?
The answer is a resounding yes. Alteryx incorporated machine learning, a type of AI, into its product several years ago, and it acquired AI start-up Feature Labs in 2019. Moreover, Alteryx recently made a strategic investment in Fiddler, strengthening its machine-learning capabilities.
However, the biggest breakthrough for Alteryx came in May 2023 when the company introduced AiDIN, an AI engine that integrates generative AI and machine learning into its platform, powered by OpenAI’s GPT application programming interface.
While Alteryx’s valuation has declined significantly since mid-2020, Wall Street’s positive outlook on the stock might not be unwarranted. The company has a substantial total addressable market, projected to expand from $81 billion in 2022 to $154 billion by 2025, representing a robust compound annual growth rate of 17%.
Additionally, a survey conducted by International Data Corporation (IDC) in August 2022 revealed that 73% of organizations anticipate spending more on analytics than on other software investments.
Despite remaining unprofitable, Alteryx continues to display strong revenue growth, with a 26% year-over-year increase in the first quarter of 2023.
With a price-to-sales multiple of less than 3.4, Alteryx’s stock is considered inexpensive compared to the industry average of nearly 5.6 for the internet software sector.
While it is uncertain if Alteryx’s stock will indeed surge by 47% over the next 12 months, there are various factors that could impact its performance, including the possibility of a recession. Nevertheless, the stock appears to have significant potential for growth. It comes as no surprise that Alteryx is now seen as one of Wall Street’s darling AI stocks.
