The continued expansion of AI and GenAI (generative artificial intelligence) has created opportunities for software infrastructure companies in these worlds, and US investment bank Cantor has picked stocks expected to benefit from this trend.
Positive picture for monday.com
Cantor software analyst Thomas Blakey has begun covering a range of companies in the sector, which includes two Israeli companies – monday.com (Nasdaq: MNDY), which has developed a work-operating system, and NICE Systems Ltd. (Nasdaq: NICE; TASE:NICE), which provides customer relations management and risk management systems. Other picks include US tech giants like Microsoft, Oracle and Palantir.
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Blakey thinks that the field will lead to the need for enterprises to consolidate data systems, their security, real-time monitoring capabilities, and more. The monetization of companies in the AI field will be estimated mainly from the increase in use and consumption, as well as from the consolidation of IT expenses of organizations. At the same time, there will be providers in the field that will also be able to benefit from direct revenues from AI products, such as specific software, various features, and more.
Among Blakey’s three top picks in the field is monday.com, which was cofounded by co-CEOs Roy Mann and Eran Zinman, and is traded on Nasdaq with a market cap of $12.1 billion after a positive 2024, although it has fallen from its peak in November. monday.com has developed a work operating system for enterprises, which helps manage work procedures and includes AI features such as the option of automation for emails. The company held its IPO in 2021 at a company valuation of $6.8 billion, which it has nearly doubled.
Blakey says that checks he has conducted with monday.com’s customers indicate a positive picture. The company is expanding its platform and adding new features that add to revenue. Despite this, he says the stock is trading at a discount to similar companies. His price target price for Monday.com’s stock is $292, a 21% upside on the current price on Nasdaq.
In contrast, Blakey gives NICE Systems a “Neutral” recommendation. Under new CEO Scott Russell, NICE leads the contact center as a service (CCaaS) sector – services in the cloud for customer relations management (CRM). In recent years NICE has focused on developing an end-to-end platform based on AI. In his estimation, as application of solutions in the field become more complex, there are delays in closing deals, leading to a decline in the rate of revenue growth in 2024.
Published by Globes, Israel business news – en.globes.co.il – on January 21, 2025.
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2025-01-21 11:24:06
