In a recent CNBC interview, Wedbush Securities analyst Dan Ives referred to artificial intelligence (AI) as the fourth industrial revolution, drawing parallels to the internet’s creation in 1995 and the launch of the iPhone in 2007. Ives predicts a significant surge in AI spending that will propel the technology sector forward in the coming years. Echoing this sentiment, billionaire fund manager Dan Loeb stated that AI has reached a level of maturity that is driving a transformational shift, similar to previous technological advancements such as personal computers, the internet, mobile devices, and cloud computing.
While the AI market has experienced a rapid increase in stock value, commonly referred to as the AI bubble, analysts believe that the interest in AI is here to stay, despite potential setbacks and drawdowns. This once-in-a-decade investment opportunity has led experts to identify Amazon and Docebo as potential avenues for investors to capitalize on the AI revolution.
Amazon, despite reporting mixed financial results in the second quarter, remains well-positioned to benefit from the growing e-commerce spending. The company’s largest opportunities lie in digital advertising and cloud computing, where it is gaining significant market share. Amazon Web Services (AWS), the largest public cloud provider globally, continues to expand its lead over competitors like Microsoft Azure and Alphabet’s Google Cloud Platform. AWS’s success can be attributed, in part, to its focus on AI, with products like Amazon Bedrock and Amazon Q gaining traction among customers. Wall Street expects Amazon’s earnings per share to grow at a rate of 25% annually through 2025, making its current valuation of 42 times earnings appear reasonable.
Docebo, a corporate learning software company, has carved a niche for itself in the market by offering innovative applications that disrupt the internal learning management system (LMS) market. Its learning management system allows businesses to create, curate, deliver, and measure the impact of training across various use cases. With applications like Docebo Flow and Docebo Shape, which integrate learning content into other applications and utilize generative AI, respectively, Docebo is leading the market in both internal and external learning opportunities. The company reported strong financial results in the second quarter, surpassing expectations on both the top and bottom lines. Wall Street projects a 58% annual increase in Docebo’s adjusted earnings through 2025, making its current valuation of 83 times adjusted earnings appear reasonable.