IBM, Duos Technologies, and Cerence are three AI stocks that are often overlooked but present excellent buying opportunities in the ever-evolving digital intelligence market.
1. IBM (NYSE: IBM): Despite not being as flashy as some of its competitors, IBM remains a profitable enterprise with a net margin of 13.18% and a return on equity (ROE) of 36.3%. Analysts predict earnings per share to increase to $9.93 for the current fiscal year, with revenue expected to reach $63 billion. Looking ahead to 2025, consensus revenue forecasts suggest a promising $65.84 billion. Trading at 2.45X trailing-year revenue and 16.44X forward earnings, IBM is a solid pick among AI stocks.
2. Duos Technologies (NASDAQ: DUOT): Specializing in software applications, Duos Technologies offers the Centraco platform for data consolidation and event management. While not the most financially stable, analysts project a substantial 116.8% increase in sales to $16.2 million by the end of this year. Revenue estimates for 2025 look even more promising at $25 million, with a high-side target of $30 million. With a current valuation at 2.98X trailing-year revenue, DUOT is a stock to watch for future growth potential.
3. Cerence (NASDAQ: CRNC): Focusing on AI-driven virtual assistants for mobility and transportation markets, Cerence is poised for significant growth. Financially, the company expects EPS to soar to $1.35 for fiscal 2024, up from 36 cents the previous year. Revenue estimates stand at $359.96 million, representing a 22.2% growth rate. At 1.13X trailing-year sales, CRNC is undervalued considering its projected growth trajectory.
These three AI stocks offer investors a chance to capitalize on the digital intelligence sector’s growth potential. While venturing off the beaten path may come with added risk, the rewards could be substantial for those willing to take the plunge into these lesser-known opportunities in the AI market.
