PagerDuty And 2 AI Stocks To Watch

AI data centre giant Elice Group plunging 38% on its first trading day shows how quickly enthusiasm around artificial intelligence can flip into doubt. When the crowd pulls back from anything with an AI label, that is often when mispriced opportunities appear. This article looks at three undervalued businesses involved in the ChatGPT and AI build out, from chips to cloud, and explains why they could belong on your watchlist now.

The three stocks below are just a small sample of the opportunities in this space. The full screen surfaced 127 more AI companies with equally compelling narratives that are not covered here.

If you want to identify and analyze your own high conviction ideas in the ChatGPT and AI build out, head straight to the Undervalued Artificial Intelligence/ AI Stocks screener.

PagerDuty (PD)

PagerDuty plugs directly into the AI operations theme of this screener, using AIOps and generative tools to keep digital services running while turning incident response into a largely software driven workflow for large enterprises.

PagerDuty runs a digital operations platform that uses machine learning and generative AI to detect, diagnose, and automate fixes for outages across software systems. It generated about US$494.7 million from software and programming in its latest period and has a market value of roughly US$1.3b.

"The accelerating adoption of AI-powered automation across IT operations is likely to commoditize incident response and real-time operations management, putting downward pressure on PagerDuty's pricing power and shrinking its core addressable market, which would cause future revenue growth to slow dramatically."

What happens if that pressure on what customers will pay arrives just as one unseen cost line quietly starts to climb?

That creeping cost risk is exactly where the full narrative for PagerDuty shows how AI driven automation, pricing power, and unit economics could still accelerate PagerDuty’s long term potential.

Marketingforce Management (SEHK:2556)

Marketingforce Management runs an AI driven cloud platform that powers marketing, sales and talent tools for Chinese enterprises, earning ¥2.1b from AI application services and ¥1.7b from precision marketing. All ¥3.9b in revenue comes from Mainland China, and the company has a roughly HK$13.2b market cap.

Marketingforce Management plugs AI directly into clients’ marketing and sales engines, using cloud tools to target customers, score leads and manage talent. Profitability, high forecast growth and strong recent sales are all tied to this AI thesis, yet much depends on how one pressure on returns evolves.

That pressure point makes it worth scanning the 4 key rewards and 1 important warning sign to see how Marketingforce Management’s AI thesis compares with its risk profile.

Alphabet (GOOGL)

Alphabet sits right on the fault line of the AI build out, with Google Cloud’s Vertex AI and Gemini models giving enterprises a direct route into large scale model training, deployment and inference while its consumer platforms quietly absorb the same tools in the background.

Alphabet runs a broad digital platform business, earning about US$367.1b from Google Services, US$77.6b from Google Cloud and US$1.5b from Other Bets, with a market value near US$4,145.1b.

"Google Cloud has gone from “meh” to money-maker. • Now #3 globally behind AWS and Azure, with over 11% market share."

What matters next for Alphabet’s AI story is how a single pressure on Cloud profitability shapes the trade off between heavy investment and future margins.

That trade off is exactly where the full narrative for Alphabet shows how Alphabet could keep accelerating Cloud while managing the margin squeeze that many investors may be underestimating.

Seeking Alternatives Beyond Your Usual Watchlist?

Fresh AI and infrastructure themes are already building momentum while most investors stay focused on the headlines. Screen these under the radar ideas before the window narrows and consider acting based on your own research.

• Spot cash generative compounders early and review the 35 high quality undervalued stocks before these financially solid prospects potentially move from overlooked to fully priced by the broader market.
• Explore structural demand in critical materials and scan the 16 top copper producer stocks for producers that may be positioned to benefit if long term electrification momentum continues.
• Target long term income potential and assess the 8 dividend fortresses curated for businesses combining higher yields with balance sheets that aim to support ongoing payouts.

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