Jim Cramer on Paycom Software: “The Whole Group is Being Weighed Down By Worries About AI Disruption”

Paycom Software, Inc. (NYSE:PAYC) is one of the stocks Jim Cramer discussed amid the reshuffling of the S&P 500. Cramer discussed the threat from AI for the company, as he commented:

Finally, Paycom Software does online payroll and human resource software at a time when there’s just so many of these companies doing the same thing. In addition to the big payroll processors like ADP and Paychex, there are smaller players like Paycom. The whole group is being weighed down by worries about AI disruption. On the one hand, Paycom’s HR software becomes less enticing when Claude can whip up something similar.

On the other hand, if you believe in AI, then you believe it will destroy jobs. That’s how it saves money, which is, of course, bad news for the payroll processors. The big dogs, ADP and Paychex, they’ve been gutted, and Paycom is down 35% over the past 12 months. It’s also off 75% from its highs in late 2021, just at $7.5 billion market cap now at these levels. Wow.

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Paycom Software, Inc. (NYSE:PAYC) provides a cloud-based software suite that helps small to mid-sized businesses manage the entire employment life cycle. The company’s platform offers tools for talent acquisition, time management, and data analytics. We recently mentioned the company while discussing oversold value stocks. You can read about it here.

While we acknowledge the risk and potential of PAYC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PAYC and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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