1. TELUS Digital (NYSE:TIXT)
Forward P/E Ratio as of October 3: 8.59
Upside Potential: 87.72%
Number of Hedge Fund Holders: 9
TELUS Digital (NYSE:TIXT), formerly known as TELUS International, provides digital customer experience and IT services, including software infrastructure solutions. The company helps businesses manage customer interactions and optimize their digital transformations. TELUS International (NYSE:TIXT) has expanded its service offerings across multiple sectors, including healthcare, finance, and e-commerce.
TELUS Digital (NYSE:TIXT) recently launched a new product called Fuel EX, an enterprise-safe generative AI (GenAI) employee assistant designed to support productivity, creativity, and research. Fuel EX provides a single point of entry for employees to access a GenAI interface, where they can select from over 20 large language models (LLM) from various vendors to help them with everyday tasks such as knowledge searches, summarization, copywriting, image generation, and code writing.
According to the 2024 Work Trend Index Annual Report from Microsoft and LinkedIn, three out of four global knowledge workers are using AI for work, and of those users, 78% are bringing their own AI tools to work, creating a major security concern for companies. Fuel EX enables companies to trust that all data inputted and produced will be kept secure, maintaining the integrity of sensitive company information.
TELUS Digital (NYSE:TIXT) is struggling with a challenging macroeconomic environment and industry competition. However, the company is focusing on bundling its services to drive revenue growth and profitability, with an emphasis on offering premium bundled offers across mobility and fixed services to increase Average Margin Per User (AMPU).
Additionally, TELUS Digital (NYSE:TIXT) is investing in product development and differentiation to stay ahead of the competition, launching new products and services such as its device-agnostic smart home platform. The company is also prioritizing cross-selling and increasing multi-product penetration to drive revenue growth, leveraging its data and AI capabilities to increase product intensity and drive revenue.
Furthermore, TELUS Digital (NYSE:TIXT) is undergoing digital transformation to improve its cost to serve and drive revenue growth, leveraging digital capabilities to improve customer experience and drive efficiency. The company is also investing in 5G and IoT to drive revenue growth, with a focus on the B2B, where it sees strong momentum. TELUS Digital (NYSE:TIXT) has also made strategic acquisitions, such as the acquisition of LifeWorks, to drive revenue growth and increase its presence in the healthcare and wellness space. Moreover, the company is forming partnerships and collaborations, such as its partnership with AWS, to drive revenue growth and improve its offerings.
Overall, TELUS Digital (NYSE:TIXT) is a high-risk, high-reward investment. The company’s ability to turn around its business and deliver on its growth story will be crucial to its success.
While we acknowledge the potential of TELUS Digital (NYSE:TIXT) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TIXT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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