3 AI Stocks Trading Below Their True Potential

Stocks to buy

Artificial intelligence (AI) is now the top buzzword in the investment space. Companies dabbling in this new technology are getting a lot of attention — others might say undeserved attention (for some stocks at least), but that’s a discussion for another day. Instead, we’ll discuss the undervalued AI stocks trading well below their potential. 

Such AI companies exhibit excellent prospects, great market saturation and financial performance geared toward growth. For one reason or another, they’ve been left out of the trending AI stocks, causing their prices to slump and marking them as “underperforming.” That’s good since investors can now swoop in and buy premium stocks at a steep discount. 

So, let’s discuss why these undervalued AI stocks deserve your attention. 

TaskUs (TASK)

Source: Sittipong Phokawattana / Shutterstock

Known for its “people-first” culture, TaskUs (NASDAQ:TASK) is a tech company that outsources digital services and customer experience to companies to enable them to grow and protect their brands. 

It uses a cloud-based infrastructure that allows its clients to outsource many of their core processes throughout their company lifecycle. TaskUs works with customers from various sectors, including fintech, health tech, ride-sharing, food delivery and other tech companies. 

The company’s omnichannel delivery model offers three main services: Artificial Intelligence Services, Trust and Safety and Customer Experience (Digital CX). Its AssistAI allows its clients to leverage the expertise of its people and the power of GenAI to increase productivity and turbocharge efficiency.

TaskUs reported a slight 3.3% YOY decrease in total revenue for FY’23. However, GAAP net income was 13% more than in 2022, while diluted EPS grew by 23.1%. Free cash flow also grew 9%. 

While this may sound minuscule, the company was actually ahead of its total revenue and EBITDA guidance despite macroeconomic headwinds, according to co-founder and CEO Bryce Maddock. 

TaskUs also announced the expansion of its client base into new sectors like healthcare and banking, which reinforces its position in serving fast-growing technology companies. The company’s resilience and continued growth of its client base show that it is poised to grow in the upcoming years, making TASK stock one of the most attractive, undervalued AI companies out there.  

RingCentral (RNG)

Source: OpturaDesign/Shutterstock.com

RingCentral (NYSE:RNG) is a top cloud communications provider due to its superior AI-driven cloud business communications, hybrid event and contact solutions. 

As a cloud communications provider, the company offers its customers a full suite of business communications tools in its platform that allow them to run webinars, video meetings, events and contact center solutions. 

It recently announced RingCX’s expanded footprint, allowing even more users to have voice call routing, fantastic analytics and over 20 digital channels in a single solution.

RingCentral’s FY’23 numbers did not disappoint. Total revenue increased 11% to $2.2 billion, and subscription revenue grew 11% to $2.329 billion. 

In addition, the company showed great bottom-line recovery, recording a net loss of $1.74 per share—a significant improvement from the $9.23 loss in 2022. Its strategic focus of becoming an AI-first multi-product company is paying off, as evidenced by its solid traction with its new products. 

While it has not been giving investors a solid price performance, its consistent growth and initiatives should be more than enough to give investors a second look at RingCentral before it truly takes off.

Opera Ltd (OPRA)

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Opera (NASDAQ:OPRA), probably best known for its mobile browser, is a Norway-based tech firm specializing in web browser development. Its operations focus on browser technology, AI-driven content discovery and recommendation platforms. 

Opera’s main revenue sources are search, advertising and technology licensing from mobile communication operators and device manufacturers. It recently announced that its new browser will receive new and innovative AI features to help it establish itself against its competitors.

Opera had a stellar FY’23, exceeding expectations with its year of solid growth and expanded margins. 

Revenue grew 20% YOY, while adjusted EBITDA hit $93.7 million and grew 38%. More importantly, net income and diluted earnings per share registered excellent growth of 1,027% and 1,231%, respectively. 

Its focus on high-ARPU users and its advertising ecosystem has been a major contributor to its success, evident in the growth of advertising and search revenue and a steady increase in monthly active users. 

Opera’s outlook anticipates FY’24 revenue to reach $450-465 million and a 24% adjusted EBITDA margin. 

With a continued investment in AI and a focus on innovation, it’s only a matter of time before investors see its real value. Truly, it’s a worthy addition to any undervalued AI stocks to watch out for. 

On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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