3 AI Stocks With Recurring Revenue And Long Term Growth Potential

The AI Stocks screener focuses on companies tied directly to the ChatGPT and broader artificial intelligence shift, across semiconductors, software, cloud and large language models. With inflation, tariffs and energy prices influencing interest rates and business costs around the world, many investors are looking for themes driven more by long term technology adoption than by any single economic data point. This screener helps you quickly filter listed stocks that are actively involved in building or supplying AI tools and infrastructure. In this article, three candidates from the AI Stocks screener are highlighted in detail.

Cerillion (AIM:CER)

Overview: Cerillion is a London headquartered software company that supplies telecom operators and subscription businesses with pre packaged platforms for billing, charging, customer management and digital self service, helping them run and monetise complex connectivity and smart city services.

Operations: Cerillion generates its revenue primarily from Software at £22.6m, Services at £17.8m and Other income of £2.0m.

Market Cap: £310.2m

Cerillion stands out in the AI Stocks screener because it combines long established telecom billing software with newer AI powered tools like its Enterprise Product Catalogue and Business Insights analytics, aimed at helping operators configure services and make faster decisions. Forecasts point to double digit revenue and earnings growth with high returns on equity, while the P/E sits close to its estimated cash flow value, which some investors may see as a balanced entry point. At the same time, the recent decline in half year revenue and earnings, high non cash earnings and questions around board independence show that execution and governance matter here. How those strengths and tension points play out is what could really move the story from here.

Cerillion’s AI driven tools and telecom roots could be masking a more complex story around quality of earnings and governance, so it is worth lining up the strengths and pressure points in one place with the 2 key rewards and 1 important major warning sign

Bytes Technology Group (LSE:BYIT)

Overview: Bytes Technology Group is a UK based IT reseller and services company that helps organisations source and manage software, cyber security, AI and cloud solutions, as well as the hardware and training needed to run them effectively.

Operations: Bytes Technology Group generates virtually all of its £220.6m revenue from its IT Solutions Provider segment, with £211.9m coming from the United Kingdom and the balance from Europe and the rest of the world.

Market Cap: £968.3m

Investors looking at AI infrastructure may consider how Bytes Technology Group sits at the crossroads of cloud, security and Microsoft centric software, with recurring renewals and upselling into public sector and corporate clients. Forecasts currently available in the market indicate expectations for revenue growth ahead of the wider UK market and high returns on equity. Recent guidance for flat operating profit and slightly lower profit margins highlights that a reset in tech costs and bonuses is underway. Alongside this, a recently approved £25m buyback and an ongoing dividend provide a combination of cash returns and growth investment. This comes with risks around public sector dependence, funding profile and Microsoft rebate changes, and it is viewed by some investors as a potentially interesting way to gain exposure to AI related themes over the longer term.

Bytes Technology Group sits at the intersection of AI demand, cloud renewals and cash returns, yet many investors may be missing how these elements fit together. Start with the analysis report for Bytes Technology Group

AdvancedAdvT (AIM:ADVT)

Overview: AdvancedAdvT is a London based software group that provides business and healthcare compliance platforms, human capital management tools and cloud based workforce management products to customers across the UK, Europe, North America and other regions.

Operations: AdvancedAdvT currently generates all of its £53.4m revenue from Internet Software & Services in the United Kingdom.

Market Cap: £224.4m

AdvancedAdvT catches the eye in the AI Stocks screener because it blends a focused software portfolio in healthcare compliance and workforce management with AI based tools that sit inside critical customer workflows. The share price is trading below one DCF derived fair value estimate and the future cash flow value per share is above the current price. Analysts expect earnings to grow strongly despite a recent year of weaker profit and an 8.6% margin that has softened from earlier levels. At the same time, the high P/E, low 3% return on equity, use of external borrowing and a large one off loss point to a more complex risk profile that investors will want to unpack carefully.

AdvancedAdvT’s AI fueled earnings story and softer 8.6% margin raise the question of whether short term pressure is masking something more powerful beneath the surface, and the 2 key rewards and 2 important warning signs hints at one detail investors often overlook

The three AI stocks highlighted here are only a slice of what is available, as the full Artificial Intelligence/ AI Stocks screener surfaces 15 more companies that the screener flags with similarly compelling AI driven narratives. Use Simply Wall St to identify and analyze the specific catalysts and storylines that matter to you across semiconductors, software, cloud and large language models so you can focus on the AI opportunities that best match your highest conviction ideas.

Take Control of Your Investment Journey

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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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