UBS says these software stocks can maximize AI, have 30% upside

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As the use cases for artificial intelligence permeate society, these four stocks could be beneficiaries, according to UBS.

The artificial intelligence boom has taken Wall Street by storm this year, and UBS thinks certain lesser-known names can capitalize going forward. The bank initiated coverage of four names on Monday with buy ratings: Clearwater Analytics, Intapp, SS & C Technologies and Thomson Reuters. The price target on three of those names implies upside of 30% or more.

mountain price graph "We see CWAN as a disruptive vertically integrated software platform poised to benefit," he added. "We see optionality from cross sell + upsell and sales productivity amid highly underpenetrated total addressable market … Long term, we see runway to 80%+ gross margins and 40%+ EBITDA—consistent with a unique architected, efficient technology stack.

mountain description "We see INTA as a beat-and-raise-story as it moves into new verticals, achieves deeper module penetration + benefits from operating leverage with its land-and-expand + word-of-mouth growth strategies," the analyst wrote. "In 2023, we see the market discounting the durability of INTA's growth amid concerns of macro headwinds." McVeigh added the firm seems well positioned to capture incremental share, which currently sits at 2.5%.

 

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