Artificial Intelligence on the ASX
You’ve no doubt heard that data is the ‘new oil’.
Hand in hand with the business world’s focus on data — gathering it, analysing it, buying it, selling it — data is rapidly expanding opportunities in the application of Artificial Intelligence (AI).
AI is making its mark in the field of large scale data storage, rapid data analysis and interpretation, with real economic benefits.
Management consulting firm McKinsey & Company forecast AI to create between US$3.5 trillion and $5.8 trillion in value per year across 19 industries; from healthcare to retail and beyond.
AI-based companies have been gaining a greater a presence on the ASX in recent years, as well as a growing list of companies adding AI capability to their core business.
Gooroo Ventures (ASX:GOO) considers itself “a global leader in the science of human thinking, transforming the way people, organisations and communities make decisions about the future”.
This is a company that, through its AI capabilities, claims to ‘know how you think’. It uses machine learning and natural language processing to map individuals’ decision-making patterns.
In October last year, GOO lodged a patent application ‘on the process of human thinking’, thereby cementing its ability to sell its unique AI solutions to businesses.
While the stock is down 76% in the two years since it listed on the ASX, it is still early stages for the micro-cap and its revenue was up 488% on the year to 30 June 2018, at A$401,516.
Promisingly, the company signed a 12 month contract with recruitment firm Amrop Carmichael Fisher a few months ago, and in May announced the expansion of its partnership with accounting giant KPMG.
AI software mid-cap LiveTiles (ASX:LVT) has been making a splash via its global software that empowers users to ‘drive their own intelligent workplace experiences’.
Its Annual Recurring Revenue (ARR) reached $15 million in the last financial year — up from $4 million in the previous year. Its share price isn’t looking bad either, up 200% over the past 12 months:
The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.
LVT raised A$25 million last month via share placement to sophisticated investors, suggesting there’s quite a bit of interest in what this AI play is offering.
In a nutshell, A$317.4 million capped LVT provides a no- or low-code solution meaning, “businesses are empowered to design user-optimised portals based on Office 365 or Azure technology, and hundreds of available APIs. These portals are created using drag-and-drop functionality and can be enhanced with AI such as LiveTiles Chatbots”.
In May, LVT acquired the Microsoft-aligned Hyperfish, a software solution that helps ‘bring an organisation’s employee directory to life, ensuring directory and profile information is always complete and up-to-date’.
Using AI and bot technology, the software identifies missing or incorrect employee directory information and initiates a conversation with employees to collect and validate data. The records are updated in the Microsoft Azure and Office 365 cloud platforms.
Interestingly, the acquisition was an all stock deal with an earn-out structure that was designed to maintain the strong commitment of the co-founders towards the continued success of Hyperfish.
The company also boasts a joint campaign with Microsoft in North America, strengthening its position in its US target market. LVT are likely hoping that this factor, as well as its unique AI-enabled functionality, will set it apart in what is a fairly crowded market.
Beyond pure AI plays, there are a large number of companies looking to integrate AI tech into their existing products to remain competitive. These companies are adding AI functionality and using it to retain or boost market share.
One such company is ASX-listed Spectur (ASX:SP3), a leading cloud-based security camera provider. Its technology offers 24/7 surveillance with live video that can be accessed in real-time from any internet connected device.
In May, the $11.8 million capped company released news of its new AI ambitions, which saw it peak at $0.06, its highest share price since January.
SP3 plans to integrate AI into its security camera system, due to the latter’s ability to quickly process complex scenarios and with a high degree of accuracy — giving a greater ability for SP3 to set specific triggers for alarms. Further features added by the AI include facial recognition, as well as object and number plate recognition.
Sounds good, although recent share price performance has been somewhat disappointing.
News of a pricing review to increase margins and recurring revenues, along with reports that revenue for the first two months of the September quarter will be over $800,000, up from $275,000 same over the same period last year, gives hope that the stock will soon outperform.
This article is General Information and contains only some information about some elements of one or more financial products. It may contain; (1) broker projections and price targets that are only estimates and may not be met, (2) historical data in terms of earnings performance and/or share trading patterns that should not be used as the basis for an investment as they may or may not be replicated. Those considering engaging with any financial product mentioned in this article should always seek independent financial advice from a licensed financial advisor before making any financial decisions.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Maven Capital Pty Ltd (AFSL No. 418504). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.