3 British AI Stocks Trading Up To 100% Below Fair Value
The US and China agreeing to formal talks on artificial intelligence puts a global policy spotlight on the technology just as UK AI companies look for capital to scale. That mix of political focus and market hesitation can leave some British AI related stocks mispriced. This article highlights three UK listed AI opportunities from our value screener that appear overlooked despite being closely tied to the ChatGPT era.
The three stocks covered below are only a starting sample from this undervalued AI list. The full screen surfaced 1 more company tied into the ChatGPT theme with a similarly compelling story that is not discussed here. To identify and analyze that extra opportunity alongside the ideas in this article, head straight into the Undervalued Artificial Intelligence/ AI Stocks screener.
Shearwater Group (AIM:SWG)
Shearwater Group is a cybersecurity specialist tied into the AI theme through its Mind Security service, which applies artificial intelligence to threat detection and incident response alongside broader advisory and software tools for large corporate and government clients.
Shearwater Group generates about £33.1 million from Services and £1.8 million from Software, with a market value of roughly £13 million. Investors are therefore looking at a small cap cybersecurity player, with most income still coming from service based work rather than its AI led offering.
For the Undervalued AI Stocks screener, Shearwater Group matters because it brings an AI driven security layer to enterprises that are rapidly deploying tools like ChatGPT. That link to cyber risk management is where the investment story starts to get interesting.
"Rising cybercrime, wider use of AI by attackers and tighter data regulation are prompting corporates and government departments to allocate more budget to cybersecurity. Inclusion in G Cloud 14 and the expanded submission to G Cloud 15 with more than 50 solutions increases exposure to U.K. government spending on cybersecurity."
What happens to future cash generation if one quiet assumption about how those AI enabled security projects are priced and renewed starts to shift?
If that pricing question matters to you, the full narrative for Shearwater Group outlines how Shearwater Group’s cybersecurity contracts could shift as AI driven workloads accelerate.
Bytes Technology Group (LSE:BYIT)
Bytes Technology Group plugs into the ChatGPT and AI shift by supplying the software, security and cloud services that let clients run large language models on scalable infrastructure, even though its AI focused work is one part of a broader IT solutions business generating about £220.6 million in revenue and supported by a market value near £1.1b.
Bytes Technology Group matters here because its AI and cloud practice turns complex machine learning platforms into ready to use tools for customers that want practical ChatGPT era capabilities without rebuilding their tech stack from scratch.
"The expansion of their cloud base in public and corporate sectors and strategic focus on AI-powered software products suggests potential for significant revenue growth as demand for these technologies increases."
What happens to Bytes Technology Group’s earnings profile if one quiet assumption about how this AI heavy cloud work is funded and priced starts to shift?
That funding shift question is exactly what the full narrative for Bytes Technology Group unpacks, including how Bytes Technology Group’s AI work could reshape its risk and reward profile.
Satsuma Technology (LSE:SATS)
Satsuma Technology is a London based AI software developer focused on subnet infrastructure and AI agents that support LLM driven and tokenized services within the ChatGPT theme, with no segment revenue breakdown disclosed and a market value of about £23.4 million.
Satsuma Technology provides exposure to the AI agent and subnet infrastructure side of the ChatGPT shift. However, with early stage sales of £0.052 million and a large £76.91 million loss, the key point of interest is how such a small platform might reprice if one unseen pressure on its funding path changes.
That funding pressure is exactly why the analysis report for Satsuma Technology could be worth your time, especially if Satsuma Technology’s early losses are masking something bigger.
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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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