Why Needham Backed Similarweb’s AI Ambitions Despite Ongoing Profitability Struggles

Similarweb Ltd. (NYSE:SMWB) is one of the best‑performing small‑cap tech names over the past few years, and its latest developments caught renewed analyst interest.

On November 17, Needham & Company LLC reiterated a “Buy” rating on Similarweb, with a price target of $14.00. Their bullish stance was driven by what they called a substantial “large language model (LLM) data opportunity,” which they estimate could become a near‑$1 billion revenue stream over time. Needham also pointed to improved go‑to‑market execution and early signs of better customer retention, which may boost revenue retention metrics heading into fiscal 2026.

Why Needham Backed Similarweb’s AI Ambitions Despite Ongoing Profitability Struggles

Sanzhar Murzin/Shutterstock.com

This rating came just days after the company’s Q3 2025 earnings (released Nov 11), in which Similarweb reported EPS of $0.05, beating consensus of $0.02, while generating $71.79 million in revenue, just shy of the ~$71.95 million analysts expected.

Still, the quarter was marked by a negative net margin of –11.2% and a negative return on equity of –78.25%, underscoring that profitability remains elusive even as top‑line and per‑share metrics slightly beat expectations.

Similarweb Ltd. (NYSE:SMWB) offers a cloud‑based digital intelligence platform that aggregates and analyzes web and app traffic data from millions of sites and applications globally. Businesses, marketers, and analysts use its insights to track market trends, benchmark competitors, optimize digital strategy, and make data‑driven decisions.

While we acknowledge the potential of SMWB to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SMWB and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None.