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What Makes Amdocs (DOX) an Attractive Investment?

Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, Palm Valley Capital Fund increased 0.79% compared to a 3.11% and 3.64% decline for the S&P SmallCap 600 Index and the Morningstar Small Cap Index, respectively. In Q2, small caps continued their trend of underperforming big caps. The fund’s equity securities saw a slight increase of +0.24% in Q2 before operational expenses (fees).  On the other hand, interest received on Treasury bills boosted quarterly profit. At the end of the period, cash equivalents made up 81.4% of the firm’s assets. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Palm Valley Capital Management highlighted stocks like Amdocs Limited (NASDAQ:DOX), in the second quarter 2024 investor letter. Amdocs Limited (NASDAQ:DOX) is a software and services provider. The one-month return of Amdocs Limited (NASDAQ:DOX) was 2.63%, and its shares lost 18.83% of their value over the last 52 weeks. On July 9, 2024, Amdocs Limited (NASDAQ:DOX) stock closed at $78.41 per share with a market capitalization of $9.089 billion.

Palm Valley Capital Management stated the following regarding Amdocs Limited (NASDAQ:DOX) in its Q2 2024 investor letter:

“The three holdings most negatively impacting the Fund’s return this quarter were Amdocs Limited (NASDAQ:DOX), TrueBlue, and Carter’s (ticker: CRI), which all had a similar drag on performance.

Amdocs, a leading software and services provider to wireless, cable, and media companies, reduced its full year revenue guidance by 0.5% and trimmed its adjusted EPS forecast by 1%. While this was immaterial to us, the market was less forgiving. The company is still modeling 7-11% EPS growth for the fiscal year. It’s possible that investors may be misinterpreting the company’s exposure to artificial intelligence. Amdocs has been occasionally mislabeled as a glorified call center cousin, when in fact it is a mission critical service provider to the world’s most important communications enterprises, including AT&T, Bell, BT, Charter, Comcast, dish, Globe, T-Mobile, Telefonica, and Vodafone. Amdocs does everything from providing customer facing portals to handling the details of billing to helping ensure that networks are operating at peak efficiency. We like to increase our exposure to Amdocs when its valuation doesn’t reflect its quality.”

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Amdocs Limited (NASDAQ:DOX) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Amdocs Limited (NASDAQ:DOX) at the end of the first quarter which was 35 in the previous quarter. Amdocs Limited (NASDAQ:DOX) reported a record revenue of $1.25 billion in the fiscal second quarter of 2024, representing a 2% year over year increase. While we acknowledge the potential of Amdocs Limited (NASDAQ:DOX) 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Amdocs Limited (NASDAQ:DOX) in another article and shared the list of stocks that will 10x in 5 years according to analysts. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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