This Artificial Intelligence (AI) Stock Is Up Like Nvidia in 2023 — And Wall Street Thinks It Could Rise Nearly 70% More

Nvidia The stock is hot despite a slight pullback in recent days. Shares of the graphics processing unit (GPU) maker have skyrocketed more than 200% so far in 2023, and many analysts believe the high-flying stock still has room to run, with a one-year price target indicating upside potential of around one. 27%.

However, investors can certainly find other interesting artificial intelligence (AI) opportunities. One AI stock, in particular, is Nvidia, which has soared this year, and Wall Street thinks it could rise nearly 70% more over the next 12 months. Yahoo! Above is based on average estimate of 12 analysts tracked. finance.

Bringing AI to the warehouse

What is this promising stock? Figurative (SYM -2.39%). Its shares are up more than 175% year-to-date as of this writing, and at one point were over 430%.

Symbotic uses its technology to bring AI to the warehouse. The company automates the processing of pallets and cases in distribution centers. It uses AI-enabled fully autonomous mobile robots as well as a fully-fledged automated warehouse platform that is, at least, the size of a football field.

Supply chain management is becoming more challenging as the number of SKUs (stock-keeping units) continues to increase. The added complexity involved in handling in-store pickup and home delivery can also make finding and retaining skilled workers difficult. Symbotic’s technology solves all these problems.

Many large corporations have already jumped on board. Symbotic’s customer base includes Walmart, targetprivately held C&S Wholesale Grocers (the largest US wholesale grocery distributor), and Albertsons (3rd largest supermarket chain in the world based on revenue).

What Wall Street Loves

Of the 13 analysts covering Symbotic surveyed by Refinitiv, 11 rate the stock a buy or strong buy. No one recommends selling. As mentioned earlier, the average price target for Symbotic is almost 70% higher than the share price as of this writing. Most bullish analysts believe the stock could double in the next 12 months.

Why does Wall Street love AI stocks so much? For one thing, Symbotic is targeting a larger market. The company currently focuses on the $144 billion US apparel, general merchandise, and food and grocery markets. Including other verticals and geographies, its total identifiable market is above $430 billion.

But with Symbotic’s recently announced joint venture Softbank Expands its addressable market by more than $500 billion. The two companies are working together to offer a warehouse-as-a-service system.

The deal gives Symbotic a contract backlog of about $23 billion. That’s huge for a company on track to generate revenue of about $1.1 billion in the current fiscal year and a market cap of just $2.6 billion.

A slam-dunk purchase?

With all of this in mind, is Symbiotic stock worth buying right now? There are some negatives to keep in mind.

First, Symbiotic is not profitable yet. The company posted a net loss of about $39 million in its latest quarter.

Second, revenue growth has slowed significantly. In Symbotic’s fiscal 2023 Q2, which ended in late March, the company reported a 177% increase in year-over-year revenue. In the following quarter, revenue grew by less than 17%. Symbotic’s guidance for the current quarter projects revenue growth of 23% year-over-year.

The company also has a lot of eggs in one basket. Last fiscal year, Walmart accounted for nearly 94% of total revenue. The veteran retailer also makes up a large part of Symbotic’s backlog.

However, the joint venture with SoftBank could address these concerns going forward. Symbotic isn’t a stock for more conservative investors, but aggressive investors looking for a way to profit from AI might want to keep it on their radar screen. It may overtake Nvidia going forward.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Target and Walmart. Motley Fool has a disclosure policy.

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