5 Best Small Cap AI Stocks To Buy Now

3. Perion Network Ltd (NASDAQ:PERI)

Number of Hedge Fund Holders: 23

Market Capitalization: $1.06 billion

We saw 23 hedge funds long Perion Network Ltd (NASDAQ:PERI) in the fourth quarter, with a total stake value of $162 million.

Perion Network Ltd (NASDAQ:PERI) is an advertising company. It uses AI and machine learning to source and optimize online traffic, among more.

A Buy rating and a $35 price target were maintained on Perion Network Ltd (NASDAQ:PERI) on February 2 by Roth MKM analysts.

Richie Capital Group mentioned Perion Network Ltd (NASDAQ:PERI) in its first-quarter 2023 investor letter:

“Perion Network Ltd. (NASDAQ:PERI) (PERI up +56.4%) – Our investment in the Israeli based ad-tech company has now been a top performer for two quarters in a row. In February, Perion announced full year 2022 earnings which included guidance for 14% revenue and EBITDA growth in 2023. This implies meaningful growth in a challenging environment where their peers continue to struggle. Despite the stock’s strong performance, Perion is still trading at a modest 19x earnings.

In addition to the optimistic growth outlook, Perion seems to be benefiting from anticipation of Bing’s new ChatGPT driven search engine. Bing is Perion’s largest customer. We, along with Perion’s management, believe that the “new Bing” offers a meaningful growth opportunity. The more users convert to Bing, the more publishers will advertise on the platform and drive Perion revenue. On Microsoft’s Q4 earnings call, CFO Amy Hood discussed the impact of growing Bing market share: “every percentage point of share it gains in search equals roughly $2 billion in additional advertising revenue.” It is difficult to envision a scenario where Perion is not a direct beneficiary of Bing’s success…” (Click here to view the full text)