3 UK AI Stocks With Real Enterprise Demand

Government bond yields in major economies are climbing toward multi decade highs as investors reassess inflation risk and the cost of capital. That puts a spotlight on companies tied to the ChatGPT and AI shift that can justify their valuations through clear real world demand. This article walks through 3 stocks from the AI Stocks screener that illustrate how different parts of the AI chain are exposed to this theme.

The three stocks below are just a starting sample. The full AI Stocks screen surfaced 15 more companies tied to the ChatGPT and AI shift with equally compelling narratives that are not covered here.

If you want to identify and analyze the rest of the field, head straight to the Artificial Intelligence/ AI Stocks screener.

Cerillion (AIM:CER)

Cerillion is a London based software company that supplies billing, charging and customer management systems to telecom operators worldwide, while also building AI into its product suite through tools like its Business Insights analytics platform and Enterprise Product Catalogue. The group generates most of its revenue from Software at about £22.6 million, with Services contributing around £17.8 million and Other activities around £2 million. Cerillion has a market cap of roughly £266 million.

Cerillion provides exposure to the AI shift through practical tools that help telecom operators use their own data for personalization, pricing and real time decisioning, rather than through more speculative pure play AI bets. The company combines an AI powered analytics platform with profitability metrics such as net margins above 30%. However, the latest half year showed revenue and earnings falling, which raises questions about how quickly new AI products can offset lumpier contract cycles. Factors such as returns on equity and a long serving board sit alongside issues such as less than fully independent governance and reliance on external funding. That mix makes Cerillion a stock where the AI story is present, and where execution and cash discipline may warrant closer inspection.

Cerillion’s mix of high margins and lumpier contract revenue can make it harder to see the full picture. Get a clearer view of how its AI tools, cash flow profile and governance fit together in the 4 key rewards and 1 important major warning sign

Build your own AI cash flow and quality shortlist

Cerillion and the other two stocks in this article all came from the same Simply Wall St screener, but the real value comes when you shape the filters around what matters most to you. Use our flexible Screener to combine metrics like valuation, growth, balance sheet strength and risks, or tap into our curated Investing Ideas for ready made shortlists.

Bytes Technology Group (LSE:BYIT)

Bytes Technology Group is a UK based IT solutions provider that resells software and hardware while helping organisations move to the cloud and roll out AI driven tools such as AI enabled security and enterprise platforms. The group reports all of its £220.6 million revenue under a single IT Solutions Provider segment and is primarily exposed to the UK, with smaller contributions from Europe and the rest of the world. The company has a market cap of about £948.2 million.

Investors looking at the ChatGPT and AI shift may find Bytes Technology Group interesting because it helps large organisations actually deploy AI in the real world through cloud migrations, LLM ready infrastructure and AI powered security services, rather than just selling licenses. That AI and cloud focus sits alongside profitability metrics such as a return on equity above 60%, but also some pressure on earnings and margins as the company invests in new systems and deals with lower margin public sector work. High reliance on external borrowing and changes to Microsoft rebate incentives add another layer of risk, which makes the combination of valuation, growth potential and funding structure worth a closer look for anyone building an AI services watchlist.

Bytes Technology Group is integrating AI deployments with cloud and security projects that many investors may be underestimating. See how that story compares with margins, rebates and funding in the analysis report for Bytes Technology Group

AdvancedAdvT (AIM:ADVT)

AdvancedAdvT is a London based software company focused on business, workforce and healthcare compliance tools, with a clear AI angle through its AI based healthcare intelligence, accreditation software and intelligent process automation products. The group currently earns about £53.4 million in revenue from Internet Software & Services, all generated in the United Kingdom, and has a market cap of roughly £231 million.

AdvancedAdvT brings together AI powered healthcare intelligence and workforce automation at a time when hospitals and care providers are under pressure to manage compliance and staffing more efficiently. Revenue of £53.4 million suggests growing commercial traction, yet net income fell to £4.61 million after a £5.6 million one off loss and margins dropped to 8.6%, so the quality and sustainability of earnings need closer attention. Forecasts of strong earnings growth, combined with experienced leadership and a focused UK software footprint, present a mix of AI themed potential along with execution and funding risks that investors may wish to assess carefully.

AdvancedAdvT’s AI healthcare and workforce tools are gaining real traction, yet margins and that £5.6 million loss leave an important question unanswered. For the full context, see the analysis report for AdvancedAdvT

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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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