According to recent reports, technology stocks are continuing their rally, with the tech-heavy NASDAQ rising 1.74% on Tuesday. This news has been met with optimism by analysts like Daniel Ives from Wedbush, who predicts that this tech rally will end the year on a bullish note.
Ives explains his stance in a recent note on the state and outlook for tech stocks, stating that he sees a tech stock rally towards the end of the year due to new tech bull markets fueling Federal Reserve concerns. He believes that it is the trajectory of AI-powered growth that will have a significant impact on the tech industry over the next 12-18 months and remains optimistic about technological stocks.
In light of this positive outlook, Ives has identified two AI-powered stocks that he believes are well-positioned to take advantage of this new tech bull market. Let’s take a closer look at these stocks and what other analysts have to say about them.
The first stock is Consensus Cloud Solutions (CCSI), an information technology company specializing in digital cloud faxing. The company offers digital cloud fax and other data transmissions to various industries, with a strong presence in healthcare but also serving clients in finance, insurance, real estate, and manufacturing sectors.
Consensus Cloud’s products include eFaxCorporate, which is considered the industry’s number one electronic fax platform. They also offer platforms for interoperability, API connectivity, NLP/AI document processing, and HIPAA-compliant electronic signatures. With a track record of creating advanced data solutions for regulated industries over 25 years, Consensus Cloud combines its expertise with secure cloud and data document transmission solutions.
The company recently launched Clarity Clinical Documentation service optimized for the healthcare industry. This tool uses natural language processing and artificial intelligence to extract relevant data from unstructured documents such as faxes and handwritten notes.
Despite a loss of revenue in its latest quarterly report, Consensus Cloud reported improved earnings. The company’s earnings per diluted share adjusted on a non-GAAP basis beat the forecast by 11 cents per share. Daniel Ives sees long-term prospects for Consensus Cloud, stating that the company is well-positioned to expand its upselling and cross-selling opportunities within its customer base while entering new markets for further growth.
Ives rates CCSI as an Outperform (Buy) and has set a price target of $42, implying a potential 34% increase over the next year. The consensus rating for CCSI is Moderate Buy, with 2 Buys and 1 Hold in the last three months.
The second stock is Pegasystems Inc. (JOB), a technology company that offers an easy-to-use platform for streamlining business operations. Their software focuses on business process and customer relationship management, enabling users to work smarter and adapt faster.
Pegasystems provides solutions for customer onboarding, sales automation, customer service and engagement, as well as intelligent automation. Their generative AI technology allows for faster and more personalized experiences by automating processes and creating low-code applications.
While Pegasystems’ second-quarter results fell short of expectations, with revenue coming in about $12 million less than expected, the company reported record cash flow for the first half of the year. Operating cash flow exceeded $110 million, while free cash flow surpassed $120 million.
Daniel Ives remains optimistic about Pegasystems’ prospects due to their focus on automating processes for businesses. He believes that their path to becoming a cloud company will lead to higher recurring revenue and gross margins driven by Pega Cloud. Ives rates JOB as an Outperform (Buy) with a price target of $65, suggesting a potential 32% increase over the next year.
The consensus rating for JOB is Moderate Buy, with 5 Buys and 6 Holds in the last three months.
Accordingly, technology stocks are experiencing a rally, and analysts like Daniel Ives are optimistic about the future. Consensus Cloud Solutions and Pegasystems Inc. are two AI-powered stocks that Ives believes have the potential to take full advantage of this tech bull market. While there may be some short-term challenges, both companies are well-positioned for long-term growth in their respective industries.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only and should not be construed as investment advice. It is important to do your own analysis before making any investment decisions.
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