Cerillion And 2 Other British AI Stocks To Watch

Central banks in Europe are still focused on stubborn inflation, and tighter policy can keep borrowing costs elevated for longer. That makes earnings growth and efficiency even more important for returns. This is where UK companies tied to artificial intelligence come in, as businesses look for tools that cut costs and improve productivity. This article highlights three stocks from our AI focused screener that aim to tap into that trend.

The stocks covered below are just a sample from this AI theme. The full screen surfaced 15 more companies with equally compelling narratives that are not included here. To identify potential AI opportunities more efficiently, go straight to the Artificial Intelligence/ AI Stocks screener.

Cerillion (AIM:CER)

Cerillion supplies billing, charging and customer management software to telecom and subscription businesses worldwide, with a growing AI angle through its Business Insights analytics platform and Enterprise Product Catalogue AI product engine. Revenue is primarily tied to Software at about £22.6 million and Services at about £17.8 million, with a smaller Other segment of about £2 million. The company is valued at roughly £287.1 million, which puts Cerillion firmly in the small to mid cap software space.

Investors watching the AI theme may find Cerillion interesting because it ties concrete AI tools directly to real world problems like billing accuracy, churn and usage analytics for telecom operators. At the same time, recent half year results showed revenue and profit declines as license revenue moved into later periods, which underlines the risk from project timing and large deal execution. The combination of a record order backlog, a growing recurring revenue base and active work on Agentic AI gives Cerillion a mix of potential growth and genuine project risk that rewards a closer look at what sits behind the headline numbers.

Cerillion’s record order backlog and AI tools could be masking a very different risk reward profile than the headline results suggest. For a detailed breakdown, see the 4 key rewards and 1 important major warning sign

Bytes Technology Group (LSE:BYIT)

Bytes Technology Group helps organisations move deeper into the cloud and AI era by supplying AI ready servers and devices, cloud platforms, SaaS licenses, and Microsoft and partner AI solutions, along with consulting to implement and manage them. Its business is reported as a single IT Solutions Provider segment that generated about £220.6 million in revenue, reflecting a mix of software, security, hardware and cloud services across the UK and abroad. The company has a market value of about £1.02b, which puts Bytes Technology Group in the mid cap range for UK listed IT and software providers.

Investors looking at the AI and cloud theme may find Bytes Technology Group interesting because it sits where customers actually buy and implement these tools, from AI enabled Microsoft software to secure cloud infrastructure. The company combines high returns on equity and solid profitability with exposure to higher margin cybersecurity and consulting work, but faces risks related to earnings growth, lower margin public sector contracts and changing Microsoft rebate structures. Recent dividend growth and board refreshes add extra detail to the story. The key question is whether Bytes can turn its AI and cloud opportunities into faster, higher quality growth from here.

Bytes Technology Group’s AI and cloud momentum may be masking a much richer story about margins, rebates and contract mix. Get the fuller picture in the analysis report for Bytes Technology Group

AdvancedAdvT (AIM:ADVT)

AdvancedAdvT is a London based software company focused on business solutions, healthcare compliance and human capital management, with a clear AI angle through its AI based healthcare intelligence compliance and accreditation software. It currently reports all revenue under Internet Software & Services, generating about £53.4 million, almost all from the UK. The company has a market value of roughly £234.3 million, which keeps AdvancedAdvT in the small to mid cap bracket for UK listed software stocks.

AdvancedAdvT taps directly into the AI and cloud shift in healthcare, where compliance and accreditation are becoming more data heavy and rules based. The company combines AI based healthcare intelligence tools and automation software with a cloud workforce management offering, which can create sticky customer relationships if adoption grows. At the same time, earnings recently declined despite higher revenue, and profit margins fell from 25.1% to 8.6%, while the P/E multiple sits well above sector averages. Investors watching this stock may want to work out whether the AI products and long term earnings growth forecasts are enough to justify the current pricing and margin pressure, or if the recent one off loss hints at deeper issues that need closer attention.

AdvancedAdvT’s AI healthcare push and high P/E suggest the market expects more than recent margins reveal. For the fuller context, see the analyst forecasts for AdvancedAdvT

Seeking Fresh Alternatives Before They Run

Markets move fast and today’s quiet opportunity can become tomorrow’s crowded trade. Scan fresh stock ideas showing early momentum while it matters and get in early.

• Spot companies quietly building strength before momentum takes off by running the 8 high quality undiscovered gems and see which stories are still flying under the radar for now.
• Lock onto cash generative businesses that have not been fully caught by the market by using the 11 high quality undervalued stocks while valuations still look reasonable.
• Prioritise resilience when markets turn choppy and focus on companies with sturdier finances by filtering through the list of solid balance sheet and fundamentals (19 results) while that list stays tight.

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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