As central banks stress targeted support instead of broad stimulus, investors are looking for companies that can grow on their own rather than relying on easy money. The AI stocks screener zeroes in on businesses directly tied to the ChatGPT and AI build out, from chips to cloud. This article walks through three stand-out AI stocks from the screener that may deserve a closer look now.
The three AI stocks below are just a sample, as the full screen surfaced 62 more companies directly tied to the ChatGPT and AI build out that also have detailed narratives not covered here. To identify and analyze the highest conviction candidates for your watchlist, head straight to the Artificial Intelligence/ AI Stocks screener.
Trend Micro (TSE:4704)
Overview: Trend Micro is a Japan headquartered cybersecurity company that sells software and services to protect cloud workloads, endpoints, networks, email and identities, with a growing focus on AI driven threat detection and response for enterprises and consumers worldwide.
Operations: Trend Micro generates most of its revenue in Japan at ¥87,873 million, with sizeable contributions from Asia Pacific at ¥77,088 million, Europe at ¥65,128 million and the Americas at ¥55,822 million.
Market Cap: ¥889.0b
Trend Micro provides exposure to AI in a very practical way by embedding large language models into its Vision One security platform and managed XDR services that are already used across large enterprises. The company reports a sizeable ARR base, rising AI related ARR and strong pre GAAP contract momentum. It is also dealing with weaker consumer sales outside Japan, payment vendor issues and slower perpetual license renewals that weigh on reported growth and guidance. Earnings and margins are supported by a plan to use AI to lower cloud and outsourcing costs and by ongoing buybacks. The balance between that AI opportunity and the execution risks is what makes Trend Micro worth a closer look for AI focused investors.
Trend Micro is trying to use AI to lower its own costs while selling AI driven security to customers, which raises a key question: Is that efficiency story already priced in or is the next twist hidden in the 2 key rewards and 1 important warning sign
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Trend Micro and the two other AI stocks in this article all came from a single screen, but the real edge comes when you shape the filters yourself. Use our flexible Screener to mix metrics like valuation, growth, balance sheet strength and risks, or tap into any of our curated Investing Ideas for a ready made starting point.
WingArc1st (TSE:4432)
Overview: WingArc1st is a Japan based software company that helps enterprises turn documents and data into usable insight, from designing and outputting business forms through its SVF products to cloud form services, document management, AI powered OCR and data analysis platforms such as Dr.Sum and MotionBoard.
Operations: WingArc1st generates all of its revenue, totaling approximately ¥31,437 million, from its Data Empowerment Business in Japan.
Market Cap: ¥110.5b
WingArc1st stands out in the AI screen because it sits at the intersection of data, documents and analytics. The company runs a single Data Empowerment segment that supports form design, digitization and visualization, and it reports a net profit margin of 21% with earnings growth of 16.7% last year and a 5 year earnings growth average of 10.6% per year. Forecasts in the source data indicate revenue and earnings growth that outpace the broader Japan market. The stock currently trades on a P/E below both the estimated fair level and many domestic peers. The board’s multi year buyback authorization adds another angle, although the use of higher risk external borrowing means the funding structure is worth closer inspection before relying on that support.
WingArc1st’s earnings growth, high margin profile and below fair value P/E may indicate that the market is not fully pricing the company. Get the full context in the analyst forecasts for WingArc1st and see what could change that picture next.
Appier Group (TSE:4180)
Overview: Appier Group is an AI native SaaS company that helps businesses use machine learning to find and keep customers, from AI powered ad targeting and bidding to personalized marketing, chatbots and customer data platforms across sectors such as e commerce, finance and gaming.
Operations: Appier Group generates all of its ¥46,487 million in revenue from its AI SaaS business, with sales mainly in Northeast Asia and additional contributions from the US and EMEA, the Greater China region and Southeast Asia.
Market Cap: ¥100.3b
Appier Group gives you direct exposure to AI tools that sit at the heart of how brands attract and convert customers, yet the stock comes with a mix of strong forecasts and real question marks. Analysts expect earnings to grow faster than revenue, but profit margins have recently narrowed and the P/E is well above the Japan software average. The shares have also fallen over the past year while the wider software sector has risen, and the balance sheet relies entirely on higher risk external borrowing. For investors, the key question is whether the growth story of this AI SaaS platform adequately balances the current valuation, volatility and funding risks that are now in plain sight.
Appier Group’s earnings story is accelerating, while its P/E and funding structure raise sharp questions that many investors may be glossing over. Get the context that ties this together in the analysis report for Appier Group
Seeking Alternatives Before The Crowd
Fresh ideas can move fast. Some stocks are building quiet momentum while others risk getting caught dropping once attention arrives. Scan these curated shortlists before the window narrows and act now.
- Target cash rich companies that are not stretched on valuation by running the curated 23 high quality undervalued stocks while that combination is still under the radar for now.
- Spot income workhorses before yields get compressed by screening the curated 37 dividend fortresses while the payout strength and balance sheet quality still line up.
- Track early winners in grid upgrades and electrification by using the focused 35 power grid technology and infrastructure stocks while these infrastructure plays are still quietly building momentum.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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