This week I’m introducing a new stock I think has been overlooked by Wall Street as an up-and-coming small cap darling play in Artificial Intelligence (“AI”): Veritone (ticker: VERI).
AI is quickly becoming the ‘next best thing’ on Wall Street within the information technology space. Right now, the leaders of the space are, of course, the usual suspects: GOOGL, NVDA, IBM, MSFT, FB and AAPL.
However, I cannot make the kind of return on my capital I’m used to achieving from this investing theme with the likes of GOOGL and AAPL. Instead, I seek the pure small-cap play with the most potential to run higher before one of the big boys decides to pick it from the tree for himself.
AI is a relatively new sector, as far as speculative investments are concerned. There are a small number of pure plays, and the markets served by these AI companies are scattered and narrowly focused, in most instances. But, overall, including increased budgets at mammoth companies such as Google, FB and the gang (who are betting large sums on AI), the sector is estimated to spike up by a compounded annual growth rate (CAGR) of 52% through 2025. That’s massive growth, not easily matched by any other sector, and is anticipated to reach $60 billion within eight years. So, a correct play in a small cap pure might turn into quite a hot bonanza for me and my subscribers.
Okay, so what’s so great about Veritone (VERI)?
Well, I emailed the company to ask for a specific case study that I can relay to my readers, so we can all get a handle on why Veritone is poised for big growth. I received back from Veritone a simple example of how compelling a case can be made for the company’s aiWARE.
The case study involves a large television broadcaster who broadcasts to 400 million households worldwide, mostly within China, but approximately 100 million household within North America. Before this broadcaster deployed aiWARE, the workload involved with tracking client advertising had become overwhelming for the two full-time production assistants employed by this broadcaster. Hiring a third assistant was contemplated.
However, after the broadcaster deployed aiWARE, it was able to search, monitor and analyze the client’s advertisers’ exposure (both audibly and visually) and provide real-time updates, across the entire broadcaster’s network. In addition, aiWARE was able to provide the same functions about competitors’ advertising campaigns. Because of the speed and detailed analysis capabilities of aiWARE, the broadcaster was able to provide near-real-time updates to its client about both the client’s advertising campaign and competitors’ campaigns. aiWARE was then able to generate a comprehensive report, which had previously taken the two production assistants as little as several days, to as much as several weeks, to produce.
In this real-life case study, the benefits of deploying aiWARE include:
- Elimination of approximately $100,000 of staffing costs each year.
- Improved workflow efficiencies by more than a factor of two.
- Created data-driven and effective interactions with the broadcaster’s advertising clients.
From my review of the capabilities of aiWARE, it appears that the larger the broadcasting operation, the more valuable aiWARE is to the enterprise. With the use of artificial intelligence to catch every instance of advertising exposure across so many markets, either audibly or visually, the task takes too many man hours of searching, reviewing and reporting, not to mention the possibility of human error.
Folks, after researching the capabilities, power, intelligence and uniqueness of aiWARE to the broadcast marketplace, I believe Veritone is a big winner. The clear benefits of reduced operational cost, efficiency, speed, and easy access to data cannot be matched by human effort. And of course, with the elimination of expensive labor costs, the return on investment made in aiWARE is ‘off the charts’, all of which suggests to me that media companies throughout the world will most likely greatly benefit from the artificial intelligence software. The selling points of aiWAFE are very strong, most especially with those responsible for containing labor cost budgets.
But here’s the breakthrough I believe might take Veritone to the next level — a level that might assure the company as the leader among companies offering off-the-shelf AI engines suites (as opposed leased AI engines). And that breakthrough came with the acquisition of Atigeo, LLC on Dec. 20, 2017.
With the acquisition of Atigeo, Veritone is now able to offer AI engines designed to process large amounts of unstructured data to aid marketing professionals ask questions they may not have thought to ask. Ha? Let me briefly explain. So, instead of a human asking appropriate questions and matching a particular AI engine(s) to answer them, Veritone’s AI software will be able to build the inquiry model and match that model with the appropriate engines available in its suite to answer the very same questions the AI software had built within its inquiry model.
Confused yet? I was until I researched further. In other words, aiWARE takes the data, inquires of the data, and matches the appropriate AI engine to answer the inquiries. There is no other AI company offering this feature, according to Veritone CEO Chad Steelberg.
Okay, why am I issuing this alert to VERI at this time?
Veritone’s Q4 earnings are scheduled to be released on Monday, Feb, 26. I anticipate a ‘double’ of revenue and a smaller per-share loss for Q4 than Wall Street expects. There’s rumblings among analysts that the company has really accelerated deals with approximately 200 broadcasters for aiWARE signed up with the company during the quarter. If these rumblings turn out to be accurate (I think they are), that’s exciting for future visibility among potential big investors of this stock. And I want to front-run this possibility, as the company is presenting at investment conferences on Tuesday, Feb 27, the day after earnings. Hmmmmmm.
As a long-term play, Veritone is aggressively acquiring AI assets to solidify its leadership role within the broadcast marketplace. So, those subscribers who seek to add a long-term play in AI to our portfolio, I think you won’t find a better small-cap AI play at this time. And for those seeking some action on Monday and Tuesday, take a look at VERI before the market closes, Monday.
The diary of a real $ trader!
Disclosure: I have no position in VERI but intend to initiate a position Friday