We recently compiled a list of the Top 8 Must-See AI News Updates Investors Probably Missed. In this article, we are going to take a look at where Youdao, Inc. (NYSE:DAO) stands against the other AI stocks.
As the US and Asia, led by China, continue to make staggering advancements in AI, experts worry that Europe may fall behind as its extremely strict regulatory approach to AI puts it at risk of becoming a “museum.”
“I think we really need to step up in Europe…the American economy, Chinese economy have been growing far faster compared to the European economies over the last 20 years,” Sweden PM Ulf Kristersson told attendees of the Techarena event in Stockholm today. “If we don’t change that, Europe will actually become some kind of a museum compared to other parts of the world.”
“To be able to compete in the new geopolitical context, Europe needs to become a place where business and innovation can thrive. That means less regulation. That means more access to capital and talent,” Kristersson added. “As it stands now, we’ve got companies having troubles using the latest technology due to uncertainties with the European legislation, companies founded in Europe relocating to the U.S. due to the lack of access to capital. That is simply not good enough.”
Despite French President Emmanuel Macron’s $113.7 million investment in AI, which included commitments from UAE and Canadian investment funds, as well as European Commission President Ursula von der Leyen announcing that the EU would mobilize $208.6 billion for AI investments in Europe, US VP JD Vance said Europe is too focused on regulating AI rather than embracing its growth potential.
“To create that kind of trust, we need international regulatory regimes that fosters the creation of AI technology rather than strangles it, and we need our European friends in particular to look to this new frontier with optimism rather than trepidation,” Vance told attendees at the Paris Summit.
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of over 1000 hedge funds, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An adult learner receiving feedback from a tutor via video-conferencing.
Youdao, Inc. (NYSE:DAO)
Number of Hedge Fund Holders: 5
Youdao, Inc. (NYSE:DAO) is a leading intelligent learning company that develops and leverages technologies to offer learning content to users of all ages via its popular online knowledge tools, including smart devices, STEAM courses, interactive learning apps, and education digitalization solutions.
On February 20th, Youdao, Inc. (NYSE:DAO) posted a 9.5% YoY drop in Q4 net revenues to $183.6 million due to a 21.2% revenue decline from the learning services segment. However, the company’s earnings per share increased markedly to $0.10 YoY. For the full year 2024, total net revenues jumped 4.4% YoY to $770.7 million, buoyed by a 48.3% growth in the online marketing services segment and stable revenues from smart devices.
“We achieved a significant milestone of first-ever full-year profitability in 2024. In terms of products and services, our AI-based and differentiated services enhanced customer loyalty, with retention rate surpassing 70% in the fourth quarter for Youdao Lingshi. In addition, we strengthened collaboration with NetEase in online marketing services, facilitating the long-term development of this segment. AI-driven subscription services continued to upgrade, leading to elevated customer satisfaction and over 130% year-over-year increase in total sales. Looking ahead, we are launching our ‘AI Native’ strategy-integrating AI more comprehensively across our business lines, for example, automating our advertising platforms and introducing AI-driven tutoring for our course customers.”
-said Dr. Feng Zhou, CEO of Youdao Inc.
Overall DAO ranks 5th on our list of the AI stocks investors probably missed. While we acknowledge the potential of DAO as an investment, 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 DAO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
