Whether we classify it as hype or bandwagon or actually address the actual merits of artificial intelligence (AI), the momentum it has gathered is challenging to ignore. It’s the hottest “commodity” in most investment spaces, and everyone from venture capitalists to retail investors wants to get in on the next big thing.
As the semiconductor giant building the hardware needed to train and host AI models, Nvidia became the poster boy for AI stock growth potential when it surpassed all other tech giants to become the most valuable company in the world. But now that it has reached that peak and there are signs of competing technologies and alternatives in the market, Canadian investors might consider buying locally.
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An education-oriented company
The first thing to know about Docebo (TSX: DCBO) is that it’s not a pure-breed AI stock. It started out in 2005 as a learning platform, and in about two decades, it has emerged as the most prominent learning platform for professionals. It caters to the learning and development needs of over 3,800 companies and has facilitated about 30 million individuals globally (so far).
Its client portfolio is impressive, including many prominent global organizations. The company has also expanded its portfolio of solutions quite significantly over the years, and they cover everything from employee onboarding and compliance training to a range of other employee development domains.
The stock and its AI connection
While Docebo wasn’t built around AI, it has integrated the technology quite well into its platform. It’s now marketing itself as the first generative AI learning platform, which allows its users to expand and explore learning horizons that are impossible to cover through conventional Learning Management Solutions (LMSs).
AI serves multiple purposes within the platform and the overall Docebo eco-system, from better performance tracking to learning content generation on the go, which can be instrumental for organizations that wish to create dynamic learning programs for a range of their employees.
As a stock, Docebo has gone through multiple bear and bull market phases over the years, and we’re currently in the former market phase.
It has fallen about 8% this year alone, and the current direction of the stock is still downward. It’s also relatively overvalued, considering its price-to-earnings ratio of 73. It has yet to announce its earnings results for the fourth quarter and the whole year (2024), but the third-quarter results seemed promising enough, with the company surpassing multiple targets. If the same happens in the fourth-quarter results, it may become the catalyst to turn the stock bullish.
Foolish takeaway
Volatility is something you have to contend with when investing in tech stocks. Even though Docebo isn’t as volatile as many others from the sector, it may experience wild upward or downward surges. The catalysts can be both internal (financial results, management change, etc.) or external, like growing interest in the overlap of AI and education.
