AI Stocks With Profits and Fair Value Appeal in UK Enterprise Software

Energy driven inflation is keeping central banks focused on policy and interest rates, yet AI stocks remain at the center of many long term technology plans. That creates an interesting setup for investors who think the ChatGPT and AI trend still has room to spread across chips, software and cloud. This article highlights 3 stocks from the AI Stocks screener that aim to capture different angles of that theme.

The three stocks below are just a starting sample from this Artificial Intelligence theme. The full screen surfaced 16 more companies with equally compelling narratives that are not covered here. To identify and analyze the highest conviction plays across chips, software and cloud, head straight into the Artificial Intelligence/ AI Stocks screener.

Cerillion (AIM:CER)

Overview: Cerillion is a London based telecom software company that supplies billing, charging and customer management platforms to communication service providers and subscription businesses worldwide, from traditional mobile and fixed operators to smart cities and enterprise users.

Operations: Cerillion generates most of its revenue from Software at about £22.6 million, followed by Services at about £17.8 million, with a smaller £2 million contribution from Other activities.

Market Cap: £275 million

Cerillion gives you exposure to AI driven telecom software through products like its Enterprise Product Catalogue and Business Insights analytics, while still being priced at a discount to some estimates of fair value. The company combines a net profit margin of 32.2% and forecast ROE with participation in TM Forum Moonshot Catalyst projects that put its agentic AI and open BSS/OSS capabilities in front of major operators. At the same time, recent half year results showed revenue and earnings down, and analysts flag high non cash earnings and reliance on external borrowing as risks. If you are weighing that trade off between these quality metrics and the identified concerns, Cerillion may warrant a closer look.

Cerillion’s rich margins and telecom AI exposure can look like a clean story, yet the mix of high non cash earnings and external borrowing raises deeper questions. Get the full picture in the 4 key rewards and 1 important major warning sign

Build your own AI software and quality shortlist

Cerillion and the two other AI stocks in this article all came from a single Simply Wall St screen, but the real edge is in shaping filters around what matters most to you. Use our flexible Screener to mix metrics like valuation, quality, growth, risks and dividends into your own shortlist, or start with any of our curated Investing Ideas.

Bytes Technology Group (LSE:BYIT)

Overview: Bytes Technology Group is a UK based IT reseller and services company that helps organisations buy and manage software, cloud, AI tools, security solutions and the hardware that runs them, while also providing training and consulting support. It acts as a key channel partner for major vendors, giving customers a single point of contact for software licensing, cybersecurity, public cloud and digital workplace projects.

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

Market Cap: £967 million

Bytes Technology Group provides focused exposure to cloud, security and AI software in the UK, supported by a long history with major vendors and a customer base that spans public and corporate sectors. Revenue and earnings show some pressure, with net income at £51.3 million and margins slightly lower, while analysts only expect moderate earnings growth and see rising costs and a shift toward lower margin public contracts as important tests. At the same time, high current and forecast returns on equity, a valuation that screens as attractive and active capital returns through dividends and buybacks keep the investment case notable for investors who carefully weigh these trade offs.

Bytes Technology Group’s mix of high returns on equity, active capital returns, and an attractive screening valuation hints at an underappreciated setup. See how those pieces fit together in the analysis report for Bytes Technology Group

AdvancedAdvT (AIM:ADVT)

Overview: AdvancedAdvT is a London based software group that provides business, healthcare compliance and human capital management solutions, including AI based healthcare intelligence tools and cloud workforce management platforms for customers in the UK and internationally.

Operations: AdvancedAdvT currently generates its £53.4 million revenue entirely from Internet Software & Services, all from the United Kingdom.

Market Cap: £231 million

AdvancedAdvT sits at the intersection of AI, healthcare compliance and workforce management, which gives it a clear tie in to the AI Stocks screener theme. The company trades at a discount to one estimate of fair value and analysts expect earnings to grow strongly over the next few years, even though revenue growth is more modest. Recent results showed revenue at £53.4 million but net income down to £4.6 million after a £5.6 million one off loss, which pushed margins lower and highlights volatility in earnings quality. With a high P/E, low 3% Return on Equity and funding entirely from external borrowing, investors who focus on the AI and healthcare angle still need to weigh these financial and governance risks carefully.

AdvancedAdvT’s AI and healthcare story looks like it could be just getting started, yet a high P/E, low 3% ROE and reliance on borrowing hint at a sharper twist inside the 2 key rewards and 2 important warning signs

Curious To Explore Smarter Alternatives?

Fresh stock ideas can move fast. Some stay under the radar for now, others build quiet momentum before a breakout. Do your homework before the crowd and act now.

• Spot sturdier compounders by scanning the list of solid balance sheet and fundamentals (20 results) and focus on companies where cash, debt and fundamentals are working in the same direction.
• Target reliable income streams using the 5 dividend fortresses to zero in on companies with higher yields that could help steady your portfolio when prices start flying.
• Chase early price strength with the 7 resilient stocks with low risk scores and see which resilient stocks have risk profiles that may hold up if momentum suddenly drops.

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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