2 AI Stocks With Parabolic Potential

Nvidia and Microsoft were fueled by the AI market's rapid rise last year. But as those AI darlings rose, many AI-related enterprises fell behind. These equities were UiPath, SentinelOne, and Baidu. Today, I'll explain why these two neglected AI stocks could rise soon.  

1. UiPath UiPath creates robotic process automation (RPA) technologies that integrate into a company's software to automate data entry, invoice processing, customer onboarding, and bulk emailing. With over 10,800 customers across 100 countries, Gartner says UiPath is the world's largest RPA company.

UiPath grew as more organizations substituted humans with RPA tools during the pandemic. Its sales rose 19% in fiscal 2023, despite inflation, rising interest rates, geopolitical crises, and other macro obstacles that caused many corporations to cut spending.  

UiPath's fiscal 2024 revenue rose 24% as such challenges alleviated. The company anticipates 19% sales growth in 2025. Analysts predict 6% adjusted EPS growth.  

Though 8 times this year's sales isn't pricey, UiPath's stock trades more than 60% below its IPO price for two reasons: UiPath is still unprofitable under GAAP, and investors worry that ChatGPT could replace its RPA capabilities. UiPath claims that generative AI tools will improve its RPA services and grow the company as it releases more advanced AI tools for data analysis. UiPath's shares might rise to its IPO price if it meets those goals.  

2. SentinelOne SentinelOne, a cybersecurity startup, offers XDR technologies using on-site equipment and cloud services. It says its AI-powered Singularity XDR platform will let firms respond to threats faster and without analysts. Though modest, three Fortune 10 corporations and hundreds of Global 2000 firms employ its services.  

SentinelOne's revenue quadrupled in fiscal 2023 (ending January) and 47% in fiscal 2024. It predicts fiscal 2025 growth of 31%–32%.  

As its dollar-based net retention rate remains above 100%, SentinelOne is adding larger clients that produce more than $100,000 in annual recurring revenue (ARR) despite slowing growth. At 8 times this year's revenues, SentinelOne's stock is roughly 40% below its IPO price and properly valued relative to its growth. Last year, the business considered takeover bids before staying independent.  

SentinelOne isn't profitable by GAAP or non-GAAP, but it might cut losses as it grows and adds organizations to its XDR platform. SentinelOne shares could rise in the next years if it stabilizes.  

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