We recently compiled a list of the 20 Best Artificial Intelligence (AI) Stocks to Buy According to Analysts. In this article, we are going to take a look at where Five9, Inc. (NASDAQ:FIVN) stands against the other AI stocks.
Consumer Electronics Show (CES) 2025 revolved around AI. If not, it’s all that exhibitors could show. Talking about the highlight of the show, it was undoubtedly the keynote from Jensen Huang. The keynote included new products to advance gaming, autonomous vehicles, robotics, and agentic AI. Huang kicked off his talk by reflecting on the company’s 3-decade journey. Later on, he highlighted several significant advancements.
Takeaways From CEO Jensen Huang’s Keynote at CES 2025
As per Huang, AI has been advancing at an ‘incredible pace.’ It started with perception AI, meaning understanding images, words, and sounds. Then it came to generative AI, meaning creating text, images, and sound. And now, it’s the era of physical AI, meaning AI that can proceed, reason, plan, and act. The AI giant introduced GeForce RTX 50 Series GPUs, which are powered by Blackwell architecture. These GPUs provide significant improvements in AI-driven rendering, enhancing gaming and creative workflows. Furthermore, Huang unveiled “Cosmos,” which is a suite of foundational AI models capable of generating photorealistic video. The models have been designed in such a way that train robots and automated systems more efficiently, further advancing robotics and autonomous technologies.
The company and its partners have rolled out AI Blueprints for agentic AI, which includes PDF-to-podcast for efficient research and video search and summarization for assessing significant quantities of video and images — allowing developers to build, test, and run AI agents anywhere.
Agentic AI- Road Ahead in 2025
TechInformed interviewed experts from leading technology companies to explore predictions about Agentic AI. As per Steven Webb, UK chief technology and innovation officer, Capgemini, 2025 will see wider adoption of small language models (SLMs) and AI agents as an era of Agentic AI is fast approaching. Using multiple SLMs throughout a toolchain is expected to play a critical role in the AI evolution. This will include going beyond the already familiar LLMs such as GPT.
Furthermore, Alan Jacobson (chief data and analytics officer at Alteryx) believes that 2025 will see the rise of Gen AI agents used to solve problems. This is an approach that is made possible by reducing costs and improving the performance and speed of LLMs. Frameworks for orchestrating Agentic AI work are expected to emerge. Notably, a large percentage of use cases are expected to start to employ this approach.
Our Methodology
To list the 20 Best Artificial Intelligence (AI) Stocks to Buy According to Analysts, we conducted extensive research and sifted through numerous online rankings. After getting an initial list of 25-30 stocks, we chose the ones that were popular among hedge funds and that analysts saw upside to. Finally, the stocks were arranged in ascending order of their average upside potential, as of 14th January. We also mentioned hedge fund sentiments around each stock, as of Q3 2024.
At Insider Monkey we are obsessed with 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 IT engineer working on a laptop as planograms for a cloud-based virtual contact center platform appear on the monitor.
Five9, Inc. (NASDAQ:FIVN)
Number of Hedge Fund Holders: 29
Average Upside Potential: 32.6%
Five9, Inc. (NASDAQ:FIVN) uses AI to revolutionize customer service operations and improve agent productivity. It integrates AI across its platform to automate processes, offers intelligent insights, and provides personalized customer experiences. Five9, Inc. (NASDAQ:FIVN) has been investing in AI solutions, which is expected to be a significant opportunity if adoption increases. The company’s AI offerings are the strong contenders in the market. Its focus on AI aligns with broader industry trends that focus more on intelligent and automated customer service solutions.
As businesses focus on automation and enhancing their customer service operations, AI-powered contact center solutions are expected to be more valuable. Five9, Inc. (NASDAQ:FIVN)’s strong AI offerings place it well to capitalize on this growing trend. If the company can establish itself as a leader in AI-powered CCaaS solutions, it can fuel significant growth and gain a competitive edge. Moreover, AI solutions often command higher price points that can result in increased customer stickiness, potentially improving revenue growth and customer retention rates.
Brown Capital Management, an investment management company, released its Q2 2024 investor letter. Here is what the fund said:
“Five9, Inc. (NASDAQ:FIVN) is a leader in cloud-based contact-center software, which serves as the routing engine to connect callers to agents. With the growth of e-commerce, consumers are making fewer in-person visits to stores but contacting companies more frequently, driving the need for world-class contact-center software solutions like Five9’s. It has been a tough couple of years for Five9’s stock and this quarter provided no relief. Competitive concerns, questions about AI’s long-term impact on the business and deteriorating macroeconomic conditions have all cast clouds over the company’s stock. Five9’s consumer segment, one of its largest divisions, has really struggled of late as clients hire fewer call-center agents, pressuring Five9’s seat-based revenue model. Total revenue growth decelerated to 13% year-over-year in the most recent quarter, down from 28% and 17% in 2022 and 2023, respectively. Moreover, management guided to 16% for the full year 2024, which some consider optimistic given the weak start to the year. These worsening sales trends further weighed on shares during the quarter.
Looking through the current industry doldrums, we see a bright future for Five9. The company inked its largest deal ever during the quarter, which will generate more than $50 million in annual revenue once fully rolled out. We believe this is an important signal of Five9’s long-term potential. The company is attacking a $60 billion market opportunity, is winning new business at industry-leading rates and is gaining share from legacy incumbents stuck with antiquated technology. We continue to assess the potential threat of AI, but so far it has provided an uplift to company results. The company’s AI product is very popular with large enterprises as it assists agents with customer interactions and can sometimes be used to fully automate interactions. Far from shrinking the number of industry seats, as some fear, management said revenue per seat doubles when customers adopt their AI applications. We expect sales growth to pick up markedly in the coming years, which should result in much stronger stock performance.”
Overall FIVN ranks 11th on our list of the best AI stocks to buy according to analysts. While we acknowledge the potential of FIVN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than AI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
