Missed Amplitude's Run? What Holders Had To Believe

If you backed Amplitude through a messy year of AI spending debates, profit guidance cuts, and even a securities fraud investigation, the outcome looks very different today. Investors who held Amplitude from the start of the year are up 34.9%, including dividends. If you were weighing a fresh bet on January 1, trying to reconcile bullish AI analytics forecasts with warnings about regulation and competition, which signals would have mattered most at that moment?

The move put Amplitude in the middle of this trade. Scan 37 AI small caps for other companies exposed to it.

The Two Stories Amplitude Investors Were Weighing

The shares cost US$11.58 at the start, and anyone looking at Amplitude had to decide which story about its future sounded more reasonable.

The optimistic view put Fair Value around US$15.67, a rough estimate of what the stock might be worth if enterprise adoption, AI analytics and multiproduct expansion supported recurring revenue and margin improvement over roughly three years.

The sceptical narrative pointed to a Fair Value closer to US$11, with privacy regulation, data access limits and heavy ongoing spending on AI and sales seen as key risks that could restrain growth and profitability.

What The Results Changed For The Amplitude Thesis

Amplitude’s Q2 2026 update showed revenue of US$100.9m alongside a loss of US$34.6m, with net margin moving further into the red from 29.6% to 34.3%. That helped the optimistic story on top line but left the profitability leg of that case unproven and closer to the cautious view that heavy AI and sales spend could weigh on margins. Overall, the evidence cut both ways.

The hinge assumption here was that scaling AI analytics would eventually improve profitability. When you look at another software company with a similar pitch, track revenue, operating income, and net margin together for several quarters to see whether higher AI spending is actually turning into healthier earnings.

What Today's Amplitude Price Already Assumes

Today Amplitude trades at US$14.75, above where this Narrative places Fair Value. The gap reflects a view that the stock already bakes in a generous outcome from its AI heavy shift and larger contracts.

The key question for you is what has to keep working for that to hold. A buyer today would be leaning on Amplitude turning AI driven usage, multiproduct adoption, and longer agreements into durable ARR gains without AI costs choking margin progress.

"Although Amplitude is leaning into an AI native product shift, management now expects gross margins to stay in the low 70s as higher inference costs and heavier data ingestion become structural, which could keep non GAAP operating margins well below long term targets and cap future earnings growth."

Not everyone reads the same price the same way. → See the lower figure this Narrative lands on, and how it gets there

Go Straight To The Source

You may be late to this rally, but that does not have to mean arriving late to every opportunity. Start with companies whose prices leave room for a different view of their future. Here are three trading below our estimates.

• Company 1 - 39% below our estimate - taps device trade-in incentives and eco policies to expand recommerce volumes.
• Company 2 - 26% below our estimate - leans on weight loss and diabetes injectables that already see strong demand.
• Company 3 - 45% below our estimate - wins digital banking mandates as institutions consolidate vendors into one platform.

Those are three of them. See all 33 potentially undervalued companies →

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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