TipRanks
7 min read
In This Article:
AI and cloud services have already made their mark on the tech landscape, and the next iteration is taking shape: artificial intelligence software as a service, or AI SaaS. Simply put, it refers to the use of cloud technology to deliver advanced AI tools while minimizing cost and resource demands for end users.
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The cloud can already reach a wide range of customers, users who require high-end computing but can’t support the infrastructure themselves. Adding AI to the mix will put advanced functions – think machine learning and natural language processing – into the cloud’s toolbox. From a user perspective, putting AI tools into the subscription-based SaaS model will also give advantages in flexibility and scalability.
The opportunity here is substantial. According to Zion Market Research, last year, the AI SaaS market was estimated to be worth $115.22 billion – and it’s predicted to see a CAGR of 38% or more over the next decade, to reach $2.97 trillion by 2034.
Covering the AI/SaaS segment from Cantor, analyst Matthew VanVliet sees major upside in this space – and in the stocks poised to benefit.
“We believe there is ample upside for the group ahead, as AI represents a much greater catalyst than anything in the past couple of years, more significant and sustainable than pandemic-era work-from-anywhere investments. Our view is the opportunity for growth to re-accelerate points to upside for the AI winners, unlocking multiple expansion if this plays out as we are expecting,” VanVliet opined.
Building on that bullish outlook, the analyst has singled out two top picks he believes are especially well-positioned to ride this next wave of AI-driven growth – a view echoed by the broader analyst community. According to the TipRanks database, both stocks carry Strong Buy consensus ratings from the Street. Let’s take a closer look.
Klaviyo, Inc. (KVYO)
The first company we’ll look at here is Klaviyo, a software firm that brings CRM (customer relationship management) to the B2C world. The company fields a proprietary data platform with AI insights, to give its customers effective marketing automation, data analysis, and customer service. The aim here is personalized service – Klaviyo’s customers can use the company’s software packages to improve their own customers’ interactions: customer profiles, omnichannel campaigns, web forms, and more.
